"We are hoping to give a set of proposals next week to the government via the Treasury," Ranawaka said.
"A Cabinet subcommittee has been formed to look at this and make proposals for the entire energy sector, to deal with fluctuations in oil prices," Ranawaka told reporters.
Sri Lanka does not have a transparent, cost-based. automatic pricing formula for petroleum to prevent arbitrary pricing from damaging the economy and the people.
The power sector has a regulator, the Public Utilities Commission (PUC), which is supposed to adjust prices at the beginning of each year, or even in the middle of the year if there is a shock to the system.
But last year the Public Utilities Commission was overridden by a political decision, despite a drought requiring more fuel based energy to be generated, while oil prices also rose.
A budget in November itself said power prices will not be adjusted, despite the existence of the PUC mechanism to adjust prices.But in February prices adjusted through an emergency 'fuel surcharge,' after the rupee came under pressure due to fast credit growth.
Minister Ranawaka said CEB's costs rose by 60 percent but the fuel surcharge only gave a 23 percent hike in revenues.
The ministerial sub-committee will also get feedback from the PUC.
"Every six months CEB's costs are given to them [PUC]," minister Ranawaka said.
"They then put forward proposals. We have given the costs for the last six months. When they give the proposals, the Cabinet sub-committee will also discuss it."
Sri Lanak's rulers have a history of deceptive pricing of energy, which damages the economy and hurt the people.
The deception starts with using bank credit to manipulate energy prices down when costs rise.
When credit demand rises due to state borrowing, central bank credit (printed money) is used to manipulate interest rates down, which then trigger a balance of payments crisis, a depreciation of the currency and high inflation.
If February 2011 interest rates were raised, power tariffs partially hiked through a fuel surcharge and most fuel prices raised above cost. But the rupee has depreciated from 110 to 133 rupees so far.
Currency depreciation raises prices of all the goods in the entire economy, including exported goods, not just energy.
Sri Lanka's rulers also use the entire energy sector to practise income re-distribution on the people, a tool originally devised by interventionist Western nations.
Some sections of society get energy below cost. Others pay massive premiums.
Even now households using more than 200 units of power pay one of the highest tariffs in the world. Religious institutes get power at rock bottom prices.
In the energy sector petrol users pay almost double the cost, with massive taxes included in the price. Now refined export petrol prices in Singapore are around 87 rupees a lire (103 US dollars a barrel) but the Colombo retail prices is 149 rupees.
Businesses usually get diesel at below cost or with minimal taxes.
In the power sector, so-called 'industrial' users are charged below cost, the highly profitable hotel sector gets preferential pricing and small households get big subsidies.
Rulers also channel taxes charged by the Treasury from the people through other goods, such as basic foods, to cover losses in the energy sector.
As long people do not understand that they are paying for power when they buy other goods which over-priced because of taxes, the illusion of cheap power can be continued.
The entire scheme is referred to as 'benefits' or 'sahaner'.
Another move is to give Treasury bonds to energy utilities to cover losses, expanding the national debt and burden not only the current generation but perhaps the next also with annual interest payments.
In the past the CEB has been given more than 50 billion rupees of Treasury bills and its debt payments taken over by the Treasury to be covered by taxes charged on other goods.
The Ceylon Petroleum Corporation was given 55 billion in Treasury bonds in the first quarter. Petroleum minister Susil Premajayantha has told parliament that talks are on to settle fresh debts of 65 billion rupees with bonds.
The CEB was now losing 200 million rupees a day despite the fuel surcharge.
"We talking to the Treasury about losses. These benefits are given to the economy," minister Ranawaka said.
"Last year we have given 7.0 billion rupees of subsidies to industries. Households have got 17 billion rupees of benefits.
"The losses in the CEB go as a profit to industries."
Though oil prices have since come down from highs seen in the first quarter, the CEB is still running thermal power flat out due to record low rainfall.
In the 1970s Sri Lanka's rules have rationed fuel, disrupting and slowing economic activity, instead of raising prices to balance external and domestic demand pressure to keep the currency stable.
The CEB has up to 2001 rationed power by power cuts instead of raising prices, disrupting economic activity.
But minister Ranawaka says all attempts will be made to avoid power cuts, despite record low rainfall.
"In India there are 12 hour cuts. In Pakistan some places get power for only 11 hours," he said.
"We are giving power 24 hours."
Minister Ranawaka says CEB's GT-7, a gas turbine generate power at 62 rupees counting only the energy costs.When capital and transmission costs of 3.50 are added it may push costs up to 70 rupee a unit. But gas turbines are the most expensive.
The Kerawalapitiya heavy fuel plant costs about 19 rupees. The coal plant is generating at around 6.50 rupees. Hydro may cost around 6.00 rupees.
In 2011, the Ceylon Petroleum Corporation lost 94.5 billion rupees and the Ceylon Electricity Board 19.2 billion rupees