News
Pricing formula sends fuel prices through the roof
By Rathindra Kuruwita
The Cabinet had introduced a fuel pricing formula, Minister of Power and Energy, Kanchana Wijesekera said, addressing the post-Cabinet Press Conference.
Wijesekera said the need for a fuel pricing formula had arisen due to the current crisis.
“When the previous government introduced a fuel formula, we were in the opposition, and we were critical of it. However, a pricing formula is a must,” he said.
With the implementation of the fuel pricing formula, the price of fuel would be changed once in two weeks or once a month, depending on the requirements, the Minister said.
Minister Wijesekera said that Sri Lanka needed about USD 530 million to import fuel for the month of June.
“However, in recent times we have only collected about Rs. 75 billion Sri Lankan rupees a month. There is a gap of 125 billion rupees. To bridge the gap, we must go to the Central Bank or to the Finance Ministry. They will have to print money to help us. So, they have asked us to cover our costs,” the minister said.
He said that the cost of importing and distributing a litre of 92 octane petrol was Rs. 421.71 and that at the previous price of Rs. 338, the Ceylon Petroleum Corporation (CPC) was making a loss of Rs. 83.71 on each litre.
“We increased prices by Rs. 82. Even with this we incur a loss of over a rupee,” the Minister said.
They had been selling a litre of 95 octane petrol at Rs. 373 when the cost of importing and distributing a litre was Rs. 444. “We have increased the price to Rs. 450 now,” he said.
The Minister said the cost of importing and distributing a litre of auto diesel was Rs. 400.60 and the price had been increased to Rs 400. The cost of a litre of super diesel was Rs. 444.94. With the increase of Rs. 116 a litre, the new price was Rs. 450.
“However, we still sell kerosene at Rs. 87 a litre. The cost is Rs. 362.26, which means we make a loss of Rs. 275.26 per kerosene litre sold. We also asked for a hike in kerosene, but the President, the Prime Minister and some other Ministers said that kerosene was used by several vulnerable groups and that we must not increase prices now,” he said.
However, there was a lot of misuse involving kerosene, especially in the transport sector, the Minister said. A significant number of buses were now run on kerosene although they increased bus fares when diesel prices went up.
“We have asked the Transport Minister to check the emission certificate of these buses and identify whether they have been using kerosene. People ask us how the Lanka Indian Oil Corporation (LIOC) makes profits when the CPC makes losses. It is mainly because we sell kerosene, the IOC doesn’t sell kerosene. We also help government institutions like the Ceylon Electricity Board (CEB), railways, Sri Lanka Transport Board (SLTB) and SriLankan Airlines. And there are many delays in payments. For example SriLankan Airlines alone owes us over 300 million US dollars,” he said.
The Minister said that they had spoken to private bus and bowser associations and asked them to increase fares, based on pricing formulas. Gas stations too had been informed that their credit limit had been increased, he said.
“We have also asked gas stations to increase the limit of fuel allocated for vehicles. Now, gas stations can pump fuel worth Rs. 2,500 to motorcycles, Rs. 3,000 to three-wheelers and Rs. 10,000 to other light vehicles. We will have to enforce these limits for a few more days. We also urge people not to hoard fuel because this will prolong the crisis,” he said.
The Minister added that the police have been raiding places that have been hoarding fuel and selling at higher rates. All gas stations now have security force personnel in civvies and in uniform to ensure the safety of the institution and employees, he added.
“We are also monitoring people who are joining queues, filling up and then taking the fuel out to sell at the black-market. This is especially happening at the IOC gas station in Narahenpita. We are monitoring this situation and soon severe action will be taken against such people,” he said.
News
SJB flays PUCSL for shifting coal scandal losses to electricity consumers
Alleging that the Public Utilities Commission of Sri Lanka (PUCSL) has shifted the massive losses, caused by the coal scam, to the hapless public, Opposition and SJB Leader, Sajith Premadasa, has questioned the conduct of the regulator, noting that it is mandated to protect the interests of both the service provider and the consumers.
Premadasa alleged that the PUCSL ignored the representations made by the SJB on behalf of local industries.
Premadasa said that the PUCSL had authorised the latest 18% increase, in response to the request made by the recently established National System Operator (Pvt) Ltd (NSO), on behalf of the NPP government.
The PUCSL was established in terms of the Public Utilities Commission of Sri Lanka Act, No. 35 of 2002. Although the PUCSL was supposed to function as a multi-sector regulator for electricity, water services and petroleum industries, successive governments refrained from bringing water services and petroleum industries under its purview.
The Opposition leader alleged that the PUCSL did the bidding of the government.
Since January this year, PUCSL has increased electricity tariffs on three occasions. The latest came into operation on 11 May.
The PUCSL consists of Prof. K. P. L. Chandralal (Chairman), Engineer Piyal Henanayake (Deputy Chairman), Dr. M.C.S. Fernando, and Lilantha Samaranayake, PhD.
Premadasa said that instead of taking tangible measures to recover the unbearable losses caused by the coal scam, the government burdened the entire country through the PUCSL.
“Don’t forget that the government is shielding its henchmen responsible for the coal scam at the expense of the country,” MP Premadasa said, pointing out that there couldn’t have been any dispute over their culpability, after the National Audit Office (NAO) found fault with the Energy Ministry for granting the tender for the supply of coal for the 2025/2026 season to a company not qualified even to participate in the tender process.
The SJB leader declared that the resignation of Energy Minister, Kumara Jayakody, and its Secretary, Prof. Udayanga Hemapala, in the immediate aftermath of Parliament defeating a no-faith motion against the Minister was meant to protect the ruling party.
The PUCSL has stated that the NSO received Rs 15 bn from the government to grant relief to 95% of the consumers. “How could the PUCSL justify unbearable electricity tariff increases for the remaining 5% of the consumers, knowing very well that it will destabilise key sectors in the economy?” a power sector expert said.
By Shamindra Ferdinando
News
Rains bring relief to debt-ridden CEB as reservoirs fill; one dead, 62 families affected by adverse weather
The widespread torrential rains currently experienced countrywide are expected to provide significant financial relief to the debt-ridden Ceylon Electricity Board (CEB) by sharply increasing hydroelectric power generation and reducing dependence on costly thermal and coal-powered electricity generation, power sector officials said yesterday.
Senior engineers of the CEB told The Island the rapid rise in water levels in major catchment areas and reservoirs had already strengthened hydropower generation capacity across the country.
Officials of the Irrigation Department confirmed that 33 reservoirs are presently spilling following continuous heavy rainfall over several parts of the island.
Among the major reservoirs spilling are Rajanganaya, Lunugamwehera, Weheragala, Deduru Oya, Nalanda and Wemedilla reservoirs, while several spill gates have been opened to release excess water due to heavy inflows into the catchment systems.
An Irrigation Department engineer said catchment areas linked to the Mahaweli, Kala Oya and southern river basins had received exceptionally heavy rainfall over the past several days.
“The inflows are extremely high. Reservoir capacities are increasing rapidly and this is highly beneficial for irrigation, water supply and hydroelectric generation,” the official said.
CEB engineers explained that the increase in reservoir storage levels would enable the Board to maximise hydroelectricity generation from major hydropower stations linked to the Mahaweli and Laxapana systems.
A senior CEB engineer said hydropower remained the cheapest electricity source available to Sri Lanka.
“Hydro generation costs are minimal compared to thermal generation. Once reservoirs fill up, we can considerably reduce expensive oil-based thermal generation,” the engineer said.
According to power sector estimates, hydroelectricity generation costs remain below Rs. 5 per unit, whereas coal-fired electricity generation costs range between approximately Rs. 18 and Rs. 25 per unit depending on international coal prices and exchange rate fluctuations.
Diesel and furnace oil-powered thermal generation are significantly more expensive, costing between Rs. 40 and Rs. 70 per unit.
CEB officials said the prevailing rainy conditions were therefore producing enormous savings for the financially-strained utility.
Daily electricity demand currently fluctuates between 45 million and 50 million units. One unit equal 1 kWh. One million units 1 GWh.
Energy sector estimates indicate that if hydropower generation replaces between 10 million and 15 million thermal-generated units daily, the CEB could save between Rs. 350 million and Rs. 900 million per day depending on the displaced fuel source.
Even replacing coal-powered generation alone could save between Rs. 150 million and Rs. 300 million daily.
“The present rains have arrived at a critical time for the CEB. Higher hydro generation means lower fuel imports, reduced thermal dispatch and major savings for the utility,” another senior engineer said.
Meanwhile, the prevailing adverse weather has also caused fatalities and damage in several districts.
The Disaster Management Centre (DMC) said one person had died while 62 families in four districts had been affected by the severe weather conditions.
The fatality was reported from the Koralai Pattu South Divisional Secretariat Division in the Batticaloa District.
According to the latest DMC situation report issued at 10.00 p.m., 17 Divisional Secretariat divisions across four districts have been affected by the disaster situation caused by the severe weather.
Some 203 persons belonging to 62 families have been affected so far, while 17 people are currently being accommodated at safe shelters.
The DMC further stated that 39 houses had been damaged due to the prevailing adverse weather conditions.
Meanwhile, the Department of Meteorology issued a red warning for heavy rains in several parts of the country.
The Met. Department said the prevailing showery conditions were expected to continue further due to the low-pressure area in the vicinity of Sri Lanka.
Very heavy showers exceeding 150 mm are likely at some places in the Western, Sabaragamuwa, Central and Northwestern provinces and in the Galle and Matara districts.
Heavy showers of about 100 mm are also likely at some places elsewhere across the island.
The Disaster Management Centre yesterday urged the public to take adequate precautions to minimise damages caused by heavy rain, strong winds and lightning during thundershowers.
By Ifham Nizam
News
President orders acceleration of Ditwah relief programmes
President Anura Kumara Dissanayake directed officials to fast-track the completion of the resettlement process for people in the Kandy District who lost their homes due to the recent Ditwah disaster. Speaking at a Special District Coordinating Committee meeting held at the Kandy District Secretariat on the 12th, the President reviewed the progress of land acquisition for resettlement at the Divisional Secretariat level.
The President emphasised the urgent need to resolve existing administrative hurdles and ensure that affected families are provided with permanent housing solutions without further delay.
During the session, the President individually consulted Divisional Secretaries on the progress of compensation for the 12,169 houses reported as partially damaged within the district. According to official data, while 4,488 families are currently eligible, only 3,038 have received compensation thus far. The President also highlighted the status of 1,583 high-risk houses requiring full resettlement and thousands of others awaiting NBRI technical reports. He instructed officials to expedite the remaining payments and clear the backlog of inspections to ensure all victims receive their due relief.
Addressing the long-term safety of the community, President Dissanayake noted that it was the government’s primary responsibility to prevent residents from returning to identified high-risk zones. The discussion focused on identifying new lands for relocation, with special attention paid to the plantation community living on private estates. Plans were discussed to reclaim government lands currently managed by private companies to facilitate these housing projects.
Additionally, the President addressed the construction of retaining walls for houses where land stabilisation is necessary and promised a solution within the coming week regarding the fluctuating prices of construction materials and compensation for business losses.
The high-level meeting was attended by a distinguished gathering, including Minister of Agriculture K.D. Lalkantha, Central Province Governor Professor Sarath Abeykoon, and Deputy Ministers Hansaka Wijemuni and Prasanna Gunasena. Several Members of Parliament, including Jagath Manuwarna and Riaz Farouk, also participated alongside the Mayor of Kandy, the District Secretary, and various heads of state departments and security forces. The collective presence of these officials underscored the government’s commitment to a coordinated and swift recovery effort for the Kandy District.
By S.K. Samaranayake
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