The Ceylon Petroleum Corporation (CPC) continues to incur a loss of Rs. 66 per litre of diesel and Rs. 52 per litre of petrol, though these losses can be absorbed thanks to other profits, including from the oil refinery and aviation fuel sales, CPC Chairman D.J. Rajakaruna said today (1).
Mr Rajakaruna made these remarks during a press conference held today (1) at the CPC head office in Dematagoda to brief the media regarding the fuel price revision.
Mr Rajakaruna stated that while the CPC incurs a cost of Rs. 528 per litre of diesel, it is sold at Rs. 392. After deducting the government subsidy of Rs. 70 per litre of diesel, the loss stands at Rs. 66. Similarly, the cost of a litre of petrol is Rs. 446, but it is sold at Rs. 414, resulting in a loss of Rs. 52 per litre, he said.
For Super Diesel, the Corporation incurs a cost of Rs. 581 per litre and sells it for Rs. 528, resulting in a loss of Rs. 53, he noted, adding that the fuel crisis is not unique to Sri Lanka but is a global challenge.
Highlighting that the world is currently facing two major conflicts, the war in the Middle East and the war between Russia and Ukraine, Mr Rajakaruna mentioned that while diesel prices in the global market have surged by 91%, domestic fuel prices have increased by only 39.5%. Similarly, while global petrol prices have risen by 80%, domestic prices have gone up by only 41.3%. Although the QR code system was introduced to curb fuel consumption, consumption is primarily controlled through price increases, and fuel consumption rises when prices drop, he said. When the Middle East conflict began in mid-February, a barrel of crude oil was priced at $69, but it has now risen to $115, he added.
Before foreign companies restricted their fuel supplies, they accounted for 53% of fuel distribution, but today the CPC supplies 80% of fuel, Mr Rajakaruna further noted. Before the war began, the CPC’s monthly expenditure on fuel was between $100 million and $200 million, but by May, this cost had surged to $520 million, the CPC Chairman added.