Mar 11, 2016 (LBO) – The marginal profit received from selling diesel is not sufficient to cover the 13.2 billion rupee loss incurred by the CPC in the first eleven months of 2015, Petroleum Minister Chandima Weerakkody said.
Minister Weerakkody told Parliament that based on last December prices the state-owned Ceylon Petroleum Corporation and Lanka IOC is currently making a profit of 17.13 rupees from a litre of diesel. (Refer Graph)
“That is because same taxes are applied for CPC and LIOC. Only variation would be different purchase prices,” Weerakkody said.
He revealed that the CPC is importing oil based on Singapore Platts prices and in December, the price of a barrel of diesel was 48.80 US dollars.
“One diesel litre is about 44 rupees at the point of unloading and 15.13 rupees added as taxes while another 18.20 added as domestic charges.”
In terms of petrol, the Minister said the delivered ex ship (DES) price for a barrel was 56.5 US dollars.
DES is a term requiring the seller to deliver goods to a buyer at an agreed port of arrival and the seller remains responsible for the goods until they are delivered.
This price includes initial oil buying price, shipping charges, insurance charges and profit margin of the importer.
For a litre of petrol the CPC pays 51.34 rupees as import costs and incurs a domestic cost of 22.06 rupees.
As per the CPC, effective from end January 2015, a litre of Lanka Petrol 92 Octane is selling at 117.00 rupees while Lanka Auto Diesel is selling at 95.00 rupees.
From the total sales of CPC, 62.5 percent are fulfilled through imports of refined products and the balance coming from domestic refining.
President Maithripala Sirisena has appointed a Cabinet Subcommittee to call for new oil tenders for lower prices.
The Government said it expects to revoke the traditional fuel buying methods and to introduce a new tender system to buy oil via transparent transactions.
“Government is also working on the preparation of a pricing formula based on the declining oil prices in the international market,” Minister further said.
“The benefits will be passed to the consumers as a result of this formula.”