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LIOC price hike: Minister Lokuge calls for report

27 Mar 2022

 
  • Says LIOC price hike in breach of agreement
  • Ministry to study agreement and report to Cabinet
  By Asiri Fernando The Ceylon Petroleum Corporation (CPC) is not planning to increase prices at the pump again, following the third price hike by Lanka India Oil Company (LIOC) last Friday (26) night, Minister of Energy Gamini Lokuge told The Sunday Morning, adding that he had directed Ministry officials to submit a report to the Cabinet regarding the LIOC price hike. According to Minister Lokuge, the Rs. 49 LIOC price hike for petrol (92 and 95 octane) is in breach of an agreement that the Energy Ministry and the LIOC had reached previously. LIOC has hiked the price of fuel at its stations four times this year. However, it did not increase the price of diesel products last Friday. “The last time there was a price hike, we had a discussion with the LIOC and agreed that they would mirror CPC prices. Last night’s price hike is in breach of that agreement,” Lokuge said, expressing disappointment that fuel prices had been increased again.   He opined that the LIOC fuel price hike may put more pressure on the State-owned CPC’s fuel station network as motorists seek cheaper fuel. The LIOC price hike may add to the strain already felt by the CPC’s distribution network, as a surge in customers may lengthen vehicle queues at State-owned fuel stations.   “I have advised the Secretary to the Ministry of Energy to study the agreement we have with the LIOC and to submit a report to the Cabinet on Monday (28) explaining what options and actions we [the Ministry] can take regarding the increase,” Minister Lokuge stressed. The Rs. 49 price hike on petrol by LIOC brings the new cost of a litre of 92 octane to Rs. 303, 95 octane to Rs. 332, and a litre of Euro 3 petrol to Rs. 312. In comparison, the prices at the pump at CPC fuel stations remain at Rs. 254 for 92 octane petrol and Rs. 283 for 95 octane petrol. Reports indicate that LIOC’s decision to increase petrol prices was due to the Sri Lankan Rupee depreciating against the US Dollar over the last few weeks, making the import of fuel more costly. The move by the Indian-owned LIOC to keep its fuel prices cost reflective comes as Sri Lanka continues to rely on a $ 500 million Indian Line of Credit to import fuel and maintain the practice of selling fuel at a subsidised amount. This is despite the ongoing economic crisis and the shortage of foreign exchange reserves.     


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