CB calls for flexible fuel pricing system

The Central Bank of Sri Lanka has notified the government of the need to introduce a flexible fuel pricing system that would allow the Ceylon Petroleum Corporation (CPC) to increase fuel prices if the global market prices for petroleum rise, Deputy Central Bank Governor Dr. Nandalal Weerasinghe said.

“Flexible fuel pricing is needed if global fuel prices go up. If that happens, the prices here should reflect those of the market so that the CPC does not make losses,” the Deputy Governor said.

He did caution, however, that the government should not take any action right now.

“There’s no need for the government to do anything about fuel pricing at the moment, since the CPC prices are below international prices. But if the international prices go up in the future, there needs to be a transparent fuel pricing formula to account for the cost increases,” he said.

The CPC benefitted from falling fuel prices in 2016 and made Rs. 69.6 billion during the year. This was a nice rebound from a trying 2015 where the CPC lost Rs. 19.9 billion.