Petrol price jacked up to cover losses due to demurrage – official

By Shiran Ranasinghe

The price of petrol had been increased by Rs 30 recently mainly to cover the losses due to late payments for oil shipments, a senior Ceylon Petroleum Corporation official told The Island. The CPC has been making profits since the prices of fuel were increased, but it still has some expenses that makes it bleed money, he said.Around 70 percent of petrol and diesel were not refined here, he said.

“When we import petrol and diesel we have to pay demurrage, late fees, port charges and shipping charges. To meet these expenses, the CPC has been compelled to increase petrol price Rs 30,” he said, adding that in July 2022, the price of a barrel of petrol was USD 159 and it had dropped to USD 105 dollars. However, the price had gone up by USD 2.5 dollars in January compared to December 2022, he said.

Meanwhile, Chaminda Hettiarachchi, Additional Secretary to the Ministry of Power, said that the price had been increased according to the price formula for fuel.Media spokesperson of the Samagi Trade Unions Collective, Ananda Palitha, said that if the price had been increased due to the price formula, prices of other types of fuel, too, should increase.

Palitha said the CPC had earned a profit of Rs. 8 billion in 2022 and bonuses to the tune of Rs. 2.2 billion in December 2022.

“Right now, the CPC makes a 75-rupee profit from selling a litre of petrol, 60 rupees from diesel and 155 from kerosene. The CPC has to pay one billion rupees to banks. All these expenses are now passed on to the people,” he said, adding that if the Sapugaskanda Oil Refinery had been developed, the CPC would have been able to make bigger profits.

“It’s cheaper to import crude oil. The tankers are large, and we can bring in larger quantities at once. Also, the byproducts of refining can be used for many productive activities. This is what we have to do,” he said.