Arjuna rejects JO accusations of moves to up fuel prices, privatise CPC

By Ashwin Hemmathagama – Our Lobby Correspondent

Minister of Petroleum Resources Development Arjuna Ranatunga yesterday rejected the UPFA Joint Opposition’s charges over an alleged move to increase fuel prices and privatise the Ceylon Petroleum Corporation (CPC).

Minister Ranatunga, responding to UPFA Joint Opposition parliamentary group leader MP Dinesh Gunawardena, stated that the Government has considerably reduced the prices immediately after the political change on 8 January and has no plans to take the benefits away from the public.

“We haven’t taken a decision to increase the fuel prices. Especially on 22 January 2015 we reduced the 92-octane petrol to Rs. 117, which was sold at Rs. 150 before. The 95-octane was reduced to Rs. 128 from Rs. 198. Auto diesel was reduced to Rs. 95 from Rs. 111 and the super diesel from Rs. 133 to Rs. 110. Especially kerosene oil was brought down to Rs. 44 from Rs. 81. These reductions have created a loss to the CPC and I will mention the details of these losses during the forthcoming budget,” said Minister Ranatunga.

According to the Minister, Lanka IOC was not given any approval to go for a price hike. “Lanka IOC claims that they have a right to increase prices. They held discussions with us as well as with the Ministry of Finance on the possibility of a price increase. However, we have informed them that a price increase is unwarranted at this juncture,” added the Minister, who explained that a pricing formula is a must to cope with international fluctuations.

“The CPC hasn’t reached a decision to increase the prices despite the international fuel prices escalating. So, we have been trying for some years to develop a pricing formula. Based on the fuel price fluctuations in the international markets we need a formula for Sri Lanka. The Government has not taken any decision to privatise the CPC, which supports the economy. It is our responsibility for us to further strengthen the CPC,” he explained.

However, MP Gunawardena wanted to know the fate of the savings the Government made from international price reductions despite the price reduction offered to local consumers. “Simply because of the global fuel price reduction the Government managed to save $ 4.5 billion during recent years. What happened to this saving? There is public opinion that Lanka IOC has been given permission to increase the prices of fuel. If allowed, such an increase of prices will have an impact on the electricity charges as well. We also would like to know if the Government had received instructions from the International Monetary Fund to privatise the CPC,” said MP Gunawardena.