CAA undecided on gas price hike

by Lalin FERNANDOPULLE

The rise in world crude oil prices is having its rippling effect on the prices of all commodities. World oil prices are on the rise with signs of an early recover from the recession.

Despite huge lay offs and drop in global export volumes in the manufacturing sector, oil prices recorded US$ 71 per barrel in the world market this week.

The prices had recorded US$ 147 per barrel in mid last year the highest point and then declined with the intensity of the world economic crisis.

Sri Lanka’s energy sector which depends on costly thermal power is considering price revisions to keep pace with the rising world energy prices.

Ceylon Electricity Board (CEB) sources said delay in commissioning the Norochcholai coal power plant and other power projects will result in a major energy crisis.

The demand for energy has risen with the growth in population and expansion in the industrial and manufacturing sectors. The energy requirement has increased with the growth in urbanisation.

Petroleum and Petroleum Resources Development Minister A. H. M. Fowzie said oil exploration in the Mannar Basin is continuing and is expected to extract oil by the specified time.

Cairn India is carrying out the exploration while the seismic surveys have been completed at a cost of US$ 10.5 million.

Energy sector experts said that a national policy is vital to stop corruption, mismanagement and to minimise waste in the power supply sectors. The losses incurred by the CEB and CPC amounts to billions of rupees due to waste and mismanagement.

Consumers of LP gas are in for another shock with a price revision expected early next month. LPG suppliers said with the rise in imports the cost a price revision is inevitable.

Consumer Affairs Authority officials are tight lipped on the price increase, which is under deliberation.

LPG prices are revised every other months, based on world oil prices, taxes and the freight charges.