Fuel prices in the domestic market can be reduced by almost 15-25% by upgrading the Sapugaskanda Oil Refinery to enhance its efficiency which would enable Sri Lanka to process cheap crude oil to proper standards, Former Chairman of the Ceylon Petroleum Corporation (CPC) Uvais Mohommed pointed out.

Speaking to TV Derana on Tuesday (19), he said that the oil refinery in Sapugaskanda is currently processing Murban crude oil, one of the most expensive and quality crude oil in the world which is reflected in the fuel prices in the domestic market.

He added that since its operationalisation in 1965, the Sapugaskanda refinery had only undergone minor maintenance and no upgrade has happened in the facility.   

“If we can upgrade, then we will be able to process any crude oil from anywhere(in the world). If we can do that (upgrade) we can bring down almost 15-25% of the selling price of fuel in the domestic market,” he emphasised.  Mohammed said that by doing so diesel prices in the domestic market could be reduced minimum by between Rs. 50 to 100.

Moreover, he said that CPC needs to invest its profit in the refinery and enhance the refinery, thereby enhancing the efficiency and the standard.

He noted that Sri Lanka is using 500 ppm diesel in domestic consumption which results in considerable environmental pollution whereas other countries use 10 ppm diesel which causes less environmental impact.

“We can enhance the quality(of fuel) to Europe standards, if we improve, then we’ll also be able to bring down less priced crude oil and refine it here (Sri Lanka) and give that benefit to the people,” Mohammed said. 

He added that the price difference between the Murban light oil barrel and Iranian light, which is low in the index, is about $ 20.

He said that by passing that $ 20 benefit to the general public through importing cheap crude oil, Sri Lanka can bring down the energy cost and power costs and make Sri Lanka another destination for the export-oriented companies to come in and put up their factories.