Cabinet Sub-Committee discusses impact of rising price of fuel in global market

The Cabinet Sub-Committee chaired by Prime Minister Mahinda Rajapaksa on Thursday discussed the rapid increase in fuel prices in the world market compared to 2019 and 2020.

The meeting was the third by the Cabinet Sub-Committee appointed on the Reimbursement of Kerosene Subsidy, Restructuring of Ports and Airports Development Tax on Crude Oil and the financial problems of the Ceylon Petroleum Corporation.

According to Central Bank, CPC's import price (CIF) in January was $ 57.65 per barrel and in February it was $ 64.07. The price paid in July to November 2020 averaged between a low of $ 41.77 per barrel and high of $ 47.74 per barrel. In April it was $ 19.56 and May $ 25.44.

Futures prices of Brent had risen to $ 65 per barrel in April from $ 55 in January this year.

According to a statement issued by Prime Minister’s Office, during the meeting the Ministers expressed their views on maintaining the relief for the people in the face of the situation that has arisen in view of the huge increase in the global fuel prices in 2021 relative to the years 2019 and 2020.

It was revealed at this meeting that a number of state institutions including the Ceylon Electricity Board are still repaying loans to the Ceylon Petroleum Corporation for the year 2019.

It was disclosed that under the fuel price stabilisation with the intervention of the Ministry of Finance last year Ceylon Petroleum Corporation had been paid Rs. 50 billion but another Rs. 79 billion was yet to be received.

Accordingly, the daily loss incurred by the Ceylon Petroleum Corporation has increased significantly.

At present the Ceylon Electricity Board is incurring a loss of around Rs. 10 per unit for providing subsidised electricity to the consumers as a relief measures, officials said.