• Rs. 57 b Govt.-backed subsidy to remain in force until Sept. 

No fuel price relief is in sight for consumers in the coming months, with the Ceylon Petroleum Corporation (CPC) indicating that elevated global prices, massive subsidy costs, and losses on imported fuels continue to weigh heavily on Sri Lanka’s fuel pricing framework. 

CPC Managing Director Dr. Mayura Neththikumarage told The Sunday Morning that the existing subsidy mechanism would remain in place until September. 

“The present decision is to continue the subsidy arrangement until September. The CPC is bearing part of the burden, while the Government is also carrying a portion of it, having allocated around Rs. 57 billion for this,” he said. 

Against this backdrop, Dr. Neththikumarage said that there was no expectation of fuel price reductions in the coming months. 

He noted that the CPC was using accumulated profits to absorb part of the financial burden arising from current losses highlighted by the Ministry of Energy. 

Figures released by the ministry point to mounting financial strain on the corporation.

According to the data, the CPC incurs an estimated loss of approximately Rs. 35 per litre on octane 92 petrol, Rs. 367 per litre on auto diesel, and Rs. 325 per litre on kerosene. 

The ministry’s figures further show that as kerosene carries no tax component, the entire pricing shortfall translates directly into losses for the CPC. 

For auto diesel, the total tax component amounts to approximately Rs. 163 per litre. However, even after offsetting this against the pricing gap, the net loss decreases only marginally. 

Meanwhile, despite recording a loss of around Rs. 35 per litre on octane 92 petrol, the fuel carries a tax component of approximately Rs. 101 per litre, partially offsetting the deficit.

Commenting on the upcoming domestic fuel price revision, Dr. Neththikumarage said that a reduction in local fuel prices could not be expected based on current global market trends. 

He explained that while global fuel prices had eased slightly compared to March and April levels, they remained above prices recorded prior to the outbreak of the Middle East conflict. 

The CPC Managing Director added that global fuel prices for 29 May would be determined later in the day, following which local pricing decisions would be considered based on prevailing market conditions. 

However, he stressed that no final decision had yet been taken on the next fuel price revision. 

He noted that the CPC’s regular fuel pricing announcements were usually made on the 31st of each month, but the timing of this month’s review required closer monitoring of global oil market movements before any decision could be finalised.

“We usually announce our prices on the 31st. However, since the 31st falls on a Sunday this time, today’s global oil prices will be announced this evening (29). We will consider all of that and make a decision,” Dr. Neththikumarage said. 

“No special discussion has been initiated regarding this yet; it needs to go through several rounds of discussions. Therefore, we cannot say anything at this moment. However, there will clearly be no reduction; we need to assess whether prices will remain at the current level or whether there will be a slight increase. Nevertheless, there won’t be a significant increase, so there is no need for undue concern,” he added. 

Dr. Neththikumarage also stated that a crude oil shipment carrying 89,000 MT of West Texas Intermediate (WTI) crude had arrived in Sri Lanka on Thursday (28). In addition, another vessel carrying 95,000 MT of Murban crude is scheduled to arrive on Sunday (31).