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CPC Chairman Sumith Wijesinghe flanked by Energy Minister Udaya Gammanpila (right) and Managing Director Buddhika Madihahewa at the media briefing yesterday
By Charumini de Silva
Ceylon Petroleum Corporation (CPC) yesterday called on the Government for a price hike, considering the global market prices and losses incurred by the State-owned entity.
“Fuel prices have soared in the world market. As of 31 August, we have incurred a loss of Rs. 70 billion and it has been estimated that the loss in October would be around Rs. 10 billion or more. The financial burden is unbearable unless there is an upward price revision,” CPC Chairman Sumith Wijesinghe told journalists at a briefing yesterday along with Energy Minister Udaya Gammanpila.
He said the Rs. 70 billion loss includes the cost of rupee depreciation against the dollar, while without it the impact was Rs. 40 billion.
Given the mounting losses Wijesinghe insisted there was no other option left but to increase the fuel prices.
In order to give relief to the people, the Government kept fuel prices unchanged for over 20 months from 10 September 2019. However, with increased world oil prices in April, the Government had to revise prices upward in June.
Since the last price revision on 11 June, Wijesinghe said Petrol Octane 92 prices have gone up by $ 13 to $ 92.01 per barrel, while Diesel has increased by $ 16 to 92.67.
The Chairman pointed out that the price hike in June was a major relief to be able manage the cash flow and breakeven.
Sale of diesel in the first seven months were 12% to 1.1 million tons, petrol sales were also up by a similar percentage to 758,000 tons.
Fuel imports in July rose by 28% to $ 256 million, of which refined petroleum amounted to $ 160 million, up by 22%. In the first seven months fuel imports rose by 41.5% to $ 2 billion and refined petroleum by 51% to $ 1.5 billion.
Volume wise crude oil imports were down by 11% to 816,000 tons whilst other petroleum imports rose by 16.5% to 2.6 million tons.
CPC import prices in August were $ 74.88 per barrel, up from $ 68.92 in July and $ 57.65 in January this year. In the one-year period ending July, crude oil prices have increased by 49% to $ 68.92 per barrel.
The Central Bank said last week crude oil prices were on a largely increasing trend. At the beginning of the period, prices increased, recording its highest level since the end October 2018, as the OPEC+ decided to maintain the previously planned output increase at least until April 2022. However, prices fell subsequently due to an unexpected rise in US crude oil stocks, signalling concerns about demand recovery.
It said prices increased again on signs of some industries switching from high priced gas to oil. Overall, both Brent and WTI prices increased by more than $ 3 per barrel.
