Petropolitics

Government subsidized petroleum based products by up to Rs. 16 billion last year and face a similar subsidy this year if fuel prices continue at current levels Government subsidized petroleum based products by up to Rs. 16 billion last year and face a similar subsidy this year if fuel prices continue at current levels Central Bank’s one off inflation due to a fuel price adjustment is better than a subsidy that will compound economic issues.

Central Bank in its annual review of the economy warned that wasteful subsidies are hindering public investment.

Last year the government spent a massive Rs. 16 billion on subsidizing fuel.

Much of this money owed to the state owned Ceylon Petroleum Corporation (CPC) and the private Lanka IOC are still to be paid.

Lanka IOC CEO told LBR earlier his company was owed over Rs. 4 billion for a fuel subsidy calculated on a formula as part of the 5 year agreement for the petroleum sector.

CPC, which is in to down stream marketing and runs a refinery, is owed over Rs. 6 billion.

The state run former monopoly was paid over Rs. 8 billion as a subsidy for the first three quarters of last year by being a