- Minister says price hike outside formula
- CPC insists it was followed
Cabinet Spokesperson Dr. Nalinda Jayatissa and the Ceylon Petroleum Corporation (CPC) yesterday (24) issued conflicting statements on whether the latest fuel price revision was based on the fuel pricing formula.
Responding to questions at the weekly Cabinet media briefing, Dr. Jayatissa stated the recent price increase was not determined using the pricing formula, citing the unprecedented surge in global oil prices.
He said the formula is designed to accommodate minor fluctuations in the international market, not extreme shocks such as the current spike.
“When the price of a barrel of crude oil, which was around US $ 70 to 78, increases to $ 130, that cannot be adjusted using the pricing formula,” he said. “If there is a change of about $ 4 or $ 5, it can be managed. But this situation cannot be handled by the formula.”
He stressed that the current volatility in global oil markets had rendered the formula ineffective, making it impossible to apply under prevailing conditions.
However, speaking at a separate media briefing, CPC Managing Director Mayura Neththikumarage contradicted the Minister’s position, maintaining that the price revision had in fact been calculated in line with the pricing formula.
“The Minister must have meant the Government has taken over some portion of the cost,” he said, referring to the fuel subsidy currently in place. “But the fuel prices were increased according to the pricing formula. There is nothing unusual about it.”
He explained that fuel pricing is determined based on import costs and associated expenses, with the Government making the final decision after reviewing the CPC’s calculations.
“There is a quantity of oil imported and there are costs involved. Considering these factors, pricing is done accordingly. There is no alternative method,” he said.
Neththikumarage added the Government’s decision to absorb part of the cost, including Rs. 100 per litre of diesel and Rs. 20 per litre of petrol, may have led to confusion over whether the formula had been applied.
“What the Minister may have meant is that once the Government takes over part of the cost, the final price may not appear to reflect the formula. But the calculations are still done based on it,” he said.
Amid concerns over supply disruptions, he also sought to reassure the public that fuel stocks remain adequate.
“There is no issue with fuel stocks. Supplies have been secured,” he said. “We missed only one crude oil shipment this month. Since then, tenders have been reopened for diesel, petrol, furnace oil, and aviation fuel. Stocks are secured until mid-May.”
The conflicting statements come at a time of heightened public concern over rising fuel prices and their wider impact on the cost of living, with questions now emerging over transparency and consistency in the Government’s pricing policy.