Cost-reflective Fuel Price Formula vital – Gammanpila

By Mario Andree | Published: 2:00 AM Nov 27 2021
FT Cost-reflective Fuel Price Formula vital – Gammanpila

By Mario Andree 

Minister of Energy, Udaya Gammanpila is now calling for a suitable ‘cost-reflective’ fuel price formula, after the present Goverment did away with the formula introduced by the former  Yahapalanaya regime.

Recently, the Central Bank of Sri Lanka (CBSL), too, called for a fuel price formula as the Ceylon Petroleum Corporation was struggling due to increased global oil prices.

Gamanpila, citing that his proposal for a fuel price stabilisation fund was not approved, said that in such a situation, a fuel price formula is vital to avoid burdening the poor.

CBSL in its Recent Economic Developments report pointed out that the average Brent price increased to USD 67.80 per barrel during the nine months ending September 2021, reflecting a 58.3% increase over the corresponding period of 2020.

Following the trends in global markets, the average price of crude oil imported by the Ceylon Petroleum Corporation increased by 47.8% to USD 66.96 per barrel during the period from January to September 2021, compared to the average import price of USD 45.31 per barrel recorded in the corresponding period of 2020, it stated.

Responding to the rise in global crude oil prices, domestic retail prices of key petroleum products were revised upward with effect from 12 June 2021.

CBSL stated, the recent rising trend of global prices of crude oil and forecasts that this trend is likely to continue during the remainder of the year, highlight that this revision is likely to be inadequate in the period ahead.

On Thursday, international media organisations reported that the USA was going to release 50 million barrels of Crude Oil to the global market from its reserves to reduce the soaring prices.

By Mario Andree | Published: 2:00 AM Nov 27 2021

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