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Strong indications fuel price hike imminent

23 Feb 2022

 
  • Dr. Ramesh Pathirana says there could be an increase soon
  • Gammanpila highlights soaring world crude oil prices
  • Special Cabinet meeting held on fuel/power crises
  • CPC hopeful of approval for price hike
  • Global oil prices reach seven-year high
  BY Pamodi Waravita Co-Cabinet Spokesman Dr. Ramesh Pathirana said yesterday (22) that there could be a fuel price hike in Sri Lanka in the near future, whilst Energy Minister Udaya Gammanpila Tweeted about the increase in Brent crude oil prices in the world market yesterday, with prices reaching a seven-year high globally. Speaking at the weekly press briefing to announce the Cabinet of Ministers’ decisions yesterday, Dr. Pathirana said that with fuel prices increasing around the world, there could be changes to the fuel price in the country in the near future. “But if there is a decrease in world prices, we will give that relief to the public too,” he added. Meanwhile, Gammanpila Tweeted yesterday that the Brent crude oil price reached $ 99 yesterday. “At this rate, we may need more than $ 500 million to import petroleum products monthly. Our monthly export earnings are approximately $ 1,000 million, and only 75% of it is received by the banking system,” said Gammanpila. A special Cabinet meeting was held last evening with President Gotabaya Rajapaksa, where the fuel and power crisis was discussed, and at the time of printing, the meeting was still ongoing. However, Ceylon Petroleum Corporation (CPC) officials told The Morning yesterday that they are expecting approval for a fuel price hike from the Government as soon as possible. Furthermore, Dr. Pathirana said that with the Ukraine crisis, fuel price hikes are inevitable around the world. “If it happens, invariably the oil prices will go up and it will badly affect the economy in Sri Lanka. We hope that it will not happen and that peace will be retained in the world,” added Dr. Pathirana. Global oil and gas prices have climbed over the past few days over fears that the Ukraine-Russia crisis will disrupt supplies across the world. Yesterday, the price of Brent crude oil, an international benchmark, reached a seven-year high of $ 99.38 a barrel after Russia ordered troops into two rebel-held regions in Ukraine’s east after it recognised them as independent states.  Locally, news reports yesterday showed that the CPC could not release a ship carrying diesel stocks from the port as the Central Bank of Sri Lanka (CBSL) was refusing to release the necessary dollars.  However, Dr. Pathirana said yesterday that President Rajapaksa had informed the Cabinet meeting on 21 February that he had instructed the CBSL to release the necessary funds and to open letters of credit (LCs) for fuel purchases for the CPC. Accordingly, senior CPC sources confirmed to The Morning last evening that the CPC hopes to begin unloading the diesel stocks at the harbour today (23). Meanwhile, power cuts occurred throughout the week due to a lack of fuel to run thermal power stations. Sri Lanka has been amidst a power shortfall since the beginning of the year, propagated by the breakdown of Unit Three of the Norochcholai Coal Power Plant, declining water reserves for the generation of electricity through hydropower, and the shortage of fuel due to the US dollar crisis. Both Gammanpila and the CPC have been continuously requesting a fuel price hike as well. The Lanka Indian Oil Corporation (LIOC) increased its fuel prices earlier this month for diesel and petrol (Octane 95) by Rs. 3 and Petrol (Octane 92) by Rs. 7 per litre.  


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