Business

Fuel prices to go up?

With the monthly fuel price revision under the fuel price formula scheduled for Tuesday (10), the international petroleum prices are hovering around the same level they were during the last fuel price revision in August.

Since the last revision, the Singapore Platts price of a barrel of petrol – according to which Sri Lanka imports fuel – had gone up by 0.8% from $ 64.85 to $ 65.40 by Friday (6), while the price of a barrel of diesel had gone up by 4.5% from $ 70.46 to $ 73.65.

According to Economic Times India, the oil prices went higher on Friday (6), with crude benchmarks poised for multi-week gains amid a sharp drawdown in US crude inventories, while trade tensions eased after Washington and Beijing agreed to hold high-level talks next month.

However, the Government does not base its monthly revisions on the Singapore Platts price of the day prior to the revision, but the average of oil prices from the previous fuel price revision to the day prior to the upcoming revision.
Based on the fuel price formula, which was brought in to reflect the fluctuations of global oil prices, this will be the eighth revision for 2019 in Sri Lanka.

The fuel price has been increased five times this year during monthly price revisions and was decreased twice.

Despite a significant increase in global oil prices in January, Sri Lanka reduced the price of a litre of 92 octane petrol by 1.6%, 95 octane by 1.3%, auto diesel by 2%, and super diesel by 2.5%.

However, following further increases in global oil prices, during the last revision, the price of petrol octane 92 was increased by Rs. 6 per litre and petrol octane 95 by Rs. 5 per litre. The price of diesel was increased by Rs. 4 per litre and super diesel by Rs. 8 per litre.

In its third revision in March, the Ministry of Finance increased the prices further by announcing a litre of petrol 95 octane for Rs. 159, petrol 92 octane for Rs.132, super diesel for Rs. 134, and auto diesel for Rs. 104. However, the third revision was delayed by three days from its planned date of 10 March due to the tabling of the Budget 2019.

Despite the Singapore Platts price of a barrel of petrol going up by 9.1% from $ 69.65 to $ 76 in the first week of April while the price of a barrel of diesel went up by 1.3% from $ 78.94 to $ 79.98, no fuel price revision took place in April.

Brent oil prices rose to almost $ 70 per barrel for the first time in nearly five months, as expectations of tight global supply outweighed rising US production and less robust global demand indicators in April.

On 10 May, a litre of petrol 95 octane increased to Rs. 164 by Rs. 5, petrol 92 octane to Rs.135 by Rs. 3, and super diesel to Rs. 136 by Rs. 2 while auto diesel was maintained at Rs. 104.

During the June revision, the Ministry of Finance increased the price of a litter of petrol 92 octane by Rs. 3 to Rs. 138 while other prices were maintained at their previous levels.

During the price revision in July, the fuel prices were decreased for the first time since January this year.

Accordingly, a litre of petrol 95 octane was decreased to Rs. 159 by Rs. 5, petrol 92 octane to Rs.136 by Rs. 2, and super diesel to Rs. 131 by Rs. 5 while auto diesel was maintained at Rs. 104.

The latest revision in August increased the prices, citing rising global petroleum prices. A litre of petrol 95 octane was increased to Rs. 163 by Rs. 4, petrol 92 octane to Rs.138 by Rs. 2, and super diesel to Rs. 134 by Rs. 3 while auto diesel was maintained at Rs. 104.

The fuel price formula is adjusted based on Platts Singapore benchmark prices which is the daily average of all trading transactions between buyers and sellers of petroleum products as assessed and summarised by the Standard and Poor’s Platts, a Singapore-based market wire service.