Independent decisions on price revisions cannot be made due to the agreements entered with other companies related to the fuel supply process, Ceylon Petroleum Corporation (CPC) and Ceylon Petroleum Storage Terminal Limited (CPSTL) Chairman D.J. Rajakaruna said.
Addressing the media on Monday (Nov 04), Rajakaruna pointed out that when prices operate without a formula, they are often determined by political advantage.
“When an election comes, the price will be reduced and later changed again. This has only resulted in the CPC falling into debt to state banks amounting to Rs. 03 billion because of having sold fuel for less than the price,” he said.
The CPC Chairman noted that following the proper implementation of the price formula, there was a profit of Rs. 120 billion last year and so far, the CPC has a profit of Rs. 27 billion.
“As a result of the intervention of politics and the system not being implemented properly, there was an opinion in the country that the CPC could not manage the operations. Because of this, other companies were invited to Sri Lanka. Now the problem is that we are unable to act independently,” he pointed out.
Stating that at present there are other companies in the market, Rajakaruna said according to the agreements made with them, this same price formula has been used by those companies since 2022.
“The Energy Ministry and the Finance Ministry finally intervened and decided a price according to this price formula. That is how the price for this month was determined. Therefore, we were able to reduce the prices of 95 Octane Petrol and Super Diesel in comparison to the decrease in the world market price. We would have been able to shuffle the reduction of prices between various fuels if there was no involvement of other companies and we could make independent decisions,” he said.
Rajakaruna further explained that according to the current agreements, if the other companies suffer a loss, and if their expenses are higher than the current price of the formula, the government is bound to pay them the loss.
“That is what the agreement states. Claims have been sent to the ministry in this regard. The government should pay that amount within three months. It is because of this issue that we really haven’t been able to change the price the way we want,” he added. (Newswire)
