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| Sunday, 8 May 2005 |
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Fuel up worldwide by Rashomi Silva Tighten up your belt, Petroleum prices are up again, and are likely to stay that way for a while predict international market analysts. According to reports the price of one barrel of light crude oil (in US) was $49.5 last Tuesday but jumped to $50.13 on Thursday. The increase of the petroleum prices will not only affect the cost of transport, but will have a ripple effect on the other areas of the economy both local and international. The ripple effect produced in other areas is yet to be calculated. Among mostly affected will be industries that depend on petroleum and natural gases to fuel their operations, analysts say. Getting to the local petroleum picture a price formula was reached out by the government and the Indian Oil Corporation (IOC) in December 2002 to increase or decrease petroleum prices depending on price fluctuations in the international market, says Ceylon Petroleum Corporation (CPC) Chairman Jaliya Madagama. According to the agreement a price revision was to be carried out every time the prices in the international market was revised, Madagama explained. The last price revision was carried out in September 2004, but the prices in the international market have increased several times since then. If the prices were increased or the CPC was subsidised by the Treasury as was agreed the CPC would not have to incur any losses. "The losses we face today are not due to the failures on the part of the administration or the management. If prices were revised or the CPC was subsidised as was agreed the CPC would be earning a gross profit of about Rs. 4,000,000," Madagama said. |
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