News

Pricing formula sends fuel prices through the roof

Published

4 years ago

2022/05/25

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.

All News Advertisement

Latest News

Heat index likely to increase up to ‘Caution level’ in the Sabaragamuwa, Northern, North-central, North-western, Eastern provinces and in Hambantota and Monaragala districts during the daytime

Published

3 hours ago

2026/05/8

Priyan

Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre
Issued at 3.30 p.m. on 07 May 2026, valid for 08 May 2026.

The Heat index, the temperature felt on the human body is likely to increase up to ‘Caution level’ at some places in the Sabaragamuwa, Northern, North-central, North-western, Eastern provinces and in Hambantota and Monaragala districts during the daytime.

The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.

ACTION REQUIRED

Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.

Note: In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.

News

Renewable energy producers left high and dry as CEB prioritises spending on oil-fired power plants

Published

3 hours ago

2026/05/8

Thilina Walpola

Sri Lanka could face a serious electricity supply crisis if outstanding payments owed to renewable energy producers are not settled urgently, industry representatives have warned.

According to renewable energy sector sources, the National System Operator (Private) Company has not paid more than Rs. 10 billion due to renewable power producers for electricity supplied to the national grid between December 2025 and April 2026.

The Federation of Renewable Energy Developers said the prolonged delay in payments had placed severe financial strain on producers and threatened the continued supply of renewable power to the national system.

Speaking to The Island, Federation Vice President Prabath Wickramasinghe said the payment crisis had emerged as authorities prioritised expenditure on diesel and furnace oil generation to offset a daily electricity shortfall of nearly 150 megawatts caused by inefficiencies in coal power generation.

He said the escalating conflict in the Middle East had sharply increased global fuel prices, resulting in a steep rise in thermal power generation costs, estimated at close to or above Rs. 10 per unit.

“In this situation, greater focus on renewable energy has become essential,” Wickramasinghe said.

He noted that the issue affected not only large-scale renewable projects but also ground-mounted solar power plants, mini-hydropower projects, wind farms and biomass power stations operating across the country. According to the Federation, 389 renewable energy plants with a combined installed capacity of 1,073.9 megawatts were currently affected.

Wickramasinghe warned that continued non-payment could lead to plant owners defaulting on bank loans and other financial obligations, while also undermining investor confidence and destabilizing the renewable energy sector.

He further cautioned that the crisis could ultimately contribute to future electricity shortages if renewable energy suppliers reduce or suspend generation.

When contacted by The Island, Chairman of the National System Operator (Private) Company Dr. B.L. Pradeep Priyadarshana Perera acknowledged delays in payments and said discussions were underway with the Ministry of Finance to resolve the issue promptly.

By Sirimantha Ratnasekera

News

PM reveals move to introduce higher education sector reform

Published

3 hours ago

2026/05/8

Thilina Walpola

PM Amarasuriya

Prime Minister Dr. Harini Amarasuriya told Parliament on Wednesday that the government was planning to reform the higher education sector in line with the ongoing transformation of the primary and secondary education systems.

Responding to questions raised by Digamadulla District NPP MP Manjula Sugath Rathnayaka, the Prime Minister said a special expert committee appointed to review the higher education sector had been functioning over the past six months and was expected to submit recommendations aimed at addressing long-standing structural and administrative issues.

“A special expert committee appointed for this purpose has been in operation over the past six months, and based on the report of this panel, existing issues in the higher education sector will be identified and the necessary reforms will be implemented,” she said.

Providing details on university admissions, Dr. Amarasuriya said 281,810 students had sat the 2025 GCE A/L Examination, and out of them 176,538 were qualified for university admission. However, only 42,937 students could gain admission to state universities.

The Prime Minister said the highest number of qualified students was from the Arts stream (58,269) candidates, followed by Commerce stream (39,608), Biological Sciences (32,935), and Physical Sciences (23,012). In addition, 12,472 students were qualified in the Engineering Technology

stream, 6,043 in the Bio-Systems Technology, and 4,199 in the General Stream.