No fuel price reduction

• Govt. to channel benefit of low global prices to pay supplies-related and bank debt and set up Petroleum Stabilisation Fund

Government Spokesman Minister Dr. Bandula Gunawardana said yesterday Cabinet had decided there would be no reduction in fuel prices, but the benefit of low rates in the global market would be used to pay supplies-related and bank debt and set up a Petroleum Stabilisation Fund. 

“We will not reduce fuel for one year and instead the Government has drawn up plans to harness the profits from the low oil prices by looking at mid-term local solutions taking into consideration the risks to the economy due to the slowdown experienced in the global economy,” Gunawardana said. 

He said the current market fuel price would be maintained while an import tax would be imposed so that a profit margin could be acquired by the Government when importing crude oil done by the Indian Oil Company (IOC) while a Petroleum Stabilisation Fund would be established using the savings from price reduction of fuel in the international market to create a fund of Rs. 200 billion within six months.

He said Rs. 50 billion from the Fund would go to the Ceylon Electricity Board (CEB) to settle the dues owed by Ceylon Petroleum Corporation. CPC will also provide CEB with crude oil at Rs. 70 per litre and settle the bank loan and interest by deducting more than Rs. 30 billion from the expenditure spent on generating thermal electricity. (CK)