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Sri Lanka’s new fuel pricing formula with Finance Ministry: Min. Champika

Oct 15, 2015 (LBO) – Sri Lanka's Minister of Megapolis and Western Province Development and former Minister of Power and Energy says that a cabinet approved pricing formula for fuel has been handed over to the Finance Ministry. Speaking to LBO Minister Champika Ranawaka said that “I have already done this.” We got cabinet approval for it when I was Minister of Power and Energy, he said. “Now it is with the Finance Ministry and it is up to them to implement it.” It is a cost reflective transparent pricing formula and based on international market prices, he added. In the interim budget 2015, the new administration reduced the selling prices of main petroleum products namely petrol, diesel and kerosene to pass through the benefit of the price reduction of the international market to the consumers with effect from mid-January 2015. Analyst says that with a proper fuel pricing formula consumers would be privy to the breakdown of various cost components such as cost of product in the international market, freight and insurance costs, government taxes and marketing margin. Sri Lanka has been subsidizing power and petroleum utilities with bank credit, pushing the country into a balance of problems. In the last few years the Sri Lankan petroleum and power sector was pushed into crisis due to state price controls, and the agencies were bailed out with Treasury bonds.
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