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Energy Ministry requests concession for CPC, LIOC 

  • If no concession, fuel prices will go up: Energy Secy. 

BY Buddhika Samaraweera

The Energy Ministry, on behalf of the country’s leading fuel suppliers Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Corporation (LIOC) PLC, has written to the Finance Ministry requesting that they be granted some concession for the import of fuel, noting that fuel prices would inevitably increase in the event such a concession is not granted. 

When contacted by The Morning, Energy Ministry Secretary K.D.R. Olga said: “The CPC and LIOC have made requests to increase fuel prices. Therefore, considering these requests, we have requested the Finance Ministry to provide some relief to these two companies to supply fuel at the existing prices.” 

When queried as to what kind of concession the companies expect, she said that the concession would most probably be a revision of the tax rates. “However, taxes on fuel imports and taxes charged by the Customs have been revised on a number of occasions over the past two years and they are now in an unchangeable state,” she noted.

However, when questioned as to whether there has been any response to the request made by the Energy Ministry from the Finance Ministry, Olga added that no such response has been received so far. She added that she had learnt that the Finance Ministry is still discussing the matter.

Speaking further, she said that compared to the fuel prices in the world market at the time of the last revision of the fuel prices in June 2021, the current world market prices have increased significantly.

Meanwhile, when queried about the current status of the Energy Ministry’s discussions with certain countries to purchase fuel under long-term credit facilities, Olga said that it was still under discussion.

“Those talks are not over yet, because agreements need to be made, their terms need to be negotiated, and the Attorney General (AG) needs to clear the agreements. Therefore, those matters are currently being discussed.” 
The CPC has recently requested the Government to increase the price of fuel, considering the current situation.

Speaking at a recent media briefing, CPC Chairman Sumith Wijesinghe claimed that the CPC had incurred a loss of Rs. 70 billion as of 31 August 2021. “Today, the CPC incurs a loss of Rs. 14.56 per litre of petrol and the loss on diesel has increased by Rs. 31.46. What the CPC should do in this kind of a situation is to increase the fuel prices,” he said.
Commenting on this, Cabinet Co-Spokesman and Energy Minister Udaya Gammanpila also said that he wishes to discuss the proposed increase in fuel prices with the Cabinet of Ministers.

Finance Ministry and Treasury Secretary S.R. Attygalle was not available for comment.