Burning Issues

Sri Lanka has sent out feelers to the Indian government for fresh round of supplier credit, as soaring world crude prices pushes fuel subsidy payments to US$ 200 million this year. Sri Lanka has sent out feelers to the Indian government for fresh round of supplier credit, as soaring world crude prices pushes fuel subsidy payments to US$ 200 million this year. With a presidential poll due this year, the Sri Lankan government is resisting a retail fuel price hike. But state-run Ceylon Petroleum Corp or CPC says a monthly price adjustment is needed to keep pace with galloping crude prices.

“If the government does not revise prices, the Treasury has to pick up the difference through subsidy payments,” CPC Chairman Jaliya Medagama told reporters on Tuesday.

The Treasury had paid out US$ 145 million as fuel subsidy payments last year to CPC. “If oil prices remain where they are now, I think the subsidy bill will go up to Rs. 20 billion (US$ 200 million) and possibly more if the oil price goes beyond current levels,” Medagama said.

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