Standard Practice

Treasury Secretary Dr. P B Jayasundara said Friday that gradual changes in fuel prices are needed, but without much disruption to domestic prices. Treasury Secretary Dr. P B Jayasundara said Friday that gradual changes in fuel prices are needed, but without much disruption to domestic prices. He said that unlimited amounts of subsidies were not healthy, given that the Treasury will have to fork out US$ 1.2 bn this year for fuel imports.

“The country’s annual oil import bill is usually around 850 million to 900 million dollars. This year we are expecting to spend about 1.2 billion rupees. But our fuel prices are heavily subsidized,” Jayasundara told participants at a seminar organized by the Ceylon Chamber of Commerce.

Sri Lanka imported an estimated 2 bn metric tones of oil and gas last year, down from 2.28 bn in 2002. Ceylon Petroleum Corp. is currently procuring oil at US$ 36 per barrel, as against US$ 32 per barrel last year

With global spare capacity at its lowest in a decade and fears of a supply disruption is likely to keep world prices at well over US$ 35 a barrel.

But the government has held back a fuel hike to ease infl