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‘No change in fuel profit margins’

‘No change in fuel profit margins’

26 Jun 2024 | BY Sahan Tennekoon

In the midst of speculation on the fuel-related profit margins, the Ministry of Power and Energy stated that there will be no changes to the profit margins for fuel.

Speaking to The Daily Morning yesterday (25), the Secretary to the Ministry Dr. Sulakshana Jayawardena stated: “The Ministry has not taken any decision to change the profit margin for fuel.”

He also emphasised that the current system employs a pricing formula that accounts for various factors, including landing costs, taxes, handling charges, and service commissions. He said that while previously, the profit margin was fixed at 4%, this was however modified a few months ago to a variable margin system. He noted that instead of a fixed margin, a variable margin is currently in operation, ensuring that profit margins do not exceed a set upper ceiling.

“The fixed margin was changed to a variable margin that does not surpass the upper ceiling and it could be established between 0-4%,” Dr. Jayawardena explained. 

He said that this change allows the profit margin to be determined by the government authorities based on the behaviour of the relevant factors. Dr. Jayawardena further elaborated on the rationale behind the variable margin, noting that it provides flexibility and ensures that the profit margin remains within a reasonable limit, safeguarding both consumers and businesses.

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