April 18, 2007 (LBO) – The Ceylon Petroleum Corporation (CPC) which lost 1.5 billion rupees in 2006 is seeking a price hike to ward off an 800 million rupee loss by April, but the government is only permitting half the increase sought by the utility. Funds were also needed lay a new pipeline from Muthurajawela to Sapugaskanda and to upgrade the network of retail outlets.
(1 US dollar = 109 rupees) The CPC has asked the government to allow an immediate increase in the price of diesel by at least five rupees to reduce current losses of 60 million rupees a month.
From midnight Wednesday diesel prices would go up by three rupees, kerosene by two rupees and furnace oil by two rupees, Petroleum Minister A H M Fowzie told LBO.
We need to increase prices as soon as possible to remain financially viable, CPC chairman Ashantha de Mel told a news conference.
The rapid increase in international fuel prices is making it unbearable to continue existing subsidies.
CPC has two thirds of the petroleum distribution market, with Lanka IOC, a unit of Indian Oil Corporation having the balance.
The CPC could end up with a loss of 800 million rupees in April if prices were not increased immediately, he said.