Feb 14, 2012 (LBO) – Sri Lanka’s state-run Ceylon Petroleum Corporation lost 89 billion rupees in 2011 and would lose 63.6 billion rupees even after a steep increase in tariffs, petroleum ministry secretary R H S Samaratunga said. “If we did not increase tariffs the CPC would have lost 188.465 billion rupees in 2012,” Samaratunga told reporters Monday.
CPC had lost 89.879 billion rupees in 2011, on top of a 24 billion rupee loss in 2010.
If Brent crude remains around 115 to 120 a barrel in 2012, the firm would still lose 63,684 million rupees, Samaratunga said.
The CPC sells petrol, on which the government charges a 25 rupees excise duty, far above cost, but most other fuels including diesel and furnace oil was sold at a loss.
Sri Lanka abandoned a monthly automatic price formula for fuel from early 2004, which helped keep inflation low and the exchange rate stable, exposing the country to high inflation and balance of payments trouble.
The automatic price formula was devised after a balance of payments crisis in 1999/2000 to help stop rulers from creating another one in the future.
Power ministry secretary M M C Ferdinando said the Ceylon Electricity Board also sometimes default on payments to CEB.