Global oil prices up ahead of fuel price revision tomorrow

With the monthly fuel price revision scheduled for tomorrow (11), as today is a holiday, global oil prices have increased significantly since the last fuel price revision on 11 February.

The Singapore Platts price of a barrel of petrol, according to which Sri Lanka imports fuel, has gone up by 13.5% from $ 61.35 on 11 February to $ 69.65, while the price of a barrel of diesel has gone up by 7.8% from $ 73.18 to $ 78.94 in this period.

However, the Government does not base its monthly revisions on the global oil prices on the day prior to the revision but the average of the global oil prices from the previous fuel price revision to the day prior to the upcoming revision.

Oil prices have risen sharply due to supply cuts led by the Organisation of the Petroleum Exporting Countries (OPEC) and US sanctions against oil giants Venezuela and Iran.

OPEC countries together with a few non-affiliated producers such as Russia are withholding around 1.2 million barrels per day (bpd) of oil, a strategy aimed at tightening markets.

Based on the fuel price formula, which was brought in to reflect the fluctuations of global oil prices, this will be the third revision for 2019 in Sri Lanka.

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 has been increased by Rs. 6 per litre and petrol octane 95 by Rs. 5 per litre. The price of diesel has been increased by Rs. 4 per litre and super diesel by Rs. 8 per litre.

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.