Govt. to revise oil prices every two months under new formula
Sri Lanka on Thursday night introduced a cost-reflective transparent fuel pricing formula, based on international market prices while increasing the price of fuel with effect from midnight Thursday, Finance Minister Mangala Samaraweera revealed.
He told a media conference in Colombo that fuel prices will fluctuate every two months in accordance with the new formula based on Platts Singapore benchmark prices,
Sri Lanka’s fuel prices are among the lowest in South Asia, he said adding that it will help ease pressure on the state coffers owing to global fuel price fluctuations.
He noted that after the present government came to power in 2015, action has been taken to reduce fuel prices despite the increase in global oil prices over the past three years, the government having to bear the losses and maintain prices at reasonable level.
Petrol (92 octane) will increase to Rs.137 and petrol (95 octane) will increase to Rs.148. Auto diesel will go up to Rs. 109 while super diesel will be sold at Rs. 119 rupees
Long queues of cars and three wheelers were seen at Colombo and suburban area petrol sheds for last minute buying fuel before the price hike.
In this much-delayed fuel pricing formula, prices would change with international market prices similar to many other commodities people consume, Minister Samarweera said.
The government was to introduce this fuel pricing formula last month in accordance with a prior commitment made to the IMF, but it had been delayed due to political upheaval faced by the ruling coalition.
Sri Lanka is levying total taxes including, excise, import duties and port levies amounting to Rs. 58.8 per litre of petrol, State Minister for Finance Eran Wickramaratne said adding that the taxation on fuel was the lowest in the South Asian region.
There was also a strong case to gradually introduce corrective taxes to both petrol and diesel to account for externalities, this can be done with increments of Rs. 0.5 a litre per month so that the consumer will not feel the effect of these revisions, Finance Ministry sources said. (Bandula)