COLOMBO (News 1^st) – The cost the government has to bear when importing fuel to the country is rising rapidly.

According to data issued by Central Bank of Sri Lanka(CBSL), the government’s expenditure in importing crude oil for the month of January alone has increased by 147%  in comparison to January 2017.

With the inception of the Good Governance Government in 2015, drastic measures were taken to reduce the prices of fuel. This was due to the fact that oil prices in the world market were relatively low compared to the previous years.

However, an upward trend in oil prices began to emerge in the world market over the past few months. It was against this backdrop that on the 23^rd of February, the Lanka Indian Oil Company increased the price of a liter of diesel by 5 Rupees and a liter of petrol by 9 Rupees.

The Ceylon Petroleum Corporation continues to sell fuel at the current price while incurring a daily loss of 33 Million Rupees.

Secretary of the Ministry of Petroleum Resources Development, Upali Marasinghe said that the government has not reached a decision to increase fuel prices.

In a report issued in August 2017, Sri Lanka was given until March this year to introduce a price formula for fuel following a directive made by the International Monetary Fund. In its evaluation report, the IMF had called for an automatic pricing mechanism to be formulated in order for Sri Lanka to secure the next tranche of the Extended Fund Facility.

Speaking to Daily FT today, State Minister of Finance Eran Wickramaratne said he is to discuss the transparent price mechanism for fuel with the IMF on the sidelines of its Spring Meetings in Washington, which have been scheduled to begin on the 20th of April.

The Daily FT, quoting the Secretary to the Ministry of Finance Dr. R.H.S Samaratunga, said:

“The Government was working on a pricing formula, which would be submitted to Cabinet after discussions between the Finance and Petroleum Ministries are concluded.”

UPFA Parliamentarian, Dinesh Gunawardene also expressed his views on the matter.

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