Govt. announces formula to re-price fuel every two months
Sri Lanka yesterday introduced the much-talked-about automatic fuel pricing mechanism, removing the heavy subsidies that drained cash from the government coffers.
Accordingly, the government raised the price of a litre of 92-octane petrol to Rs.137 from Rs.117 and a litre of diesel to Rs.119 from Rs.109 effective from today.
This is the first time Sri Lanka raised prices of fuel since the current coalition government came into power in January 2015. “The fuel prices will be reviewed every two months and the prices will be adjusted on the 5th of the next month and will be announced according to the formula,” Finance and Mass Media Minister Mangala Samaraweera told reporters in Colombo, yesterday.
He said re-pricing of fuel prices will be based on Platts Singapore benchmark prices.
Samaraweera said subsidies kept fuel prices artificially low below the regional peers while costing the State-run Ceylon Petroleum Corporation (CPC) Rs 55.89 billion annually, which is equivalent to the annual budget allocation of the Agriculture Ministry.
Meanwhile, the minister denied the claims that the International Monetary Fund (IMF) exerted pressure on the government to introduce the automatic pricing formula for fuel.
The IMF last month said they would consider the completion of the fourth review of the Extended Fund Facility programme with Sri Lanka subject to Cabinet approval of an automatic fuel pricing formula by June.
“The IMF’S deadline is not the issue. This is something we have to do for ourselves. Calling this an IMF condition seems unfair because it implies that this is something done to benefit the IMF. However, this is something we are doing for the benefit of the country and our people,” Samaraweera said.