On President's direction:

Reduction in fuel prices, one of my biggest tasks - Yapa

by Uditha Kumarasinghe

Petroleum Industries Minister Anura Priyadharshana Yapa said that the reduction in fuel prices on two recent occasions was one of the biggest tasks his Ministry fulfilled for the benefit of the consumers on the direction of President Mahinda Rajapaksa.

The Ministry reduced the fuel prices last September. The price of a litre of 95 Octane petrol by Rs. 5, 92 Octane petrol by Rs. 5, Lanka Auto Diesel by Rs. 3, Lanka Super Diesel by Rs. 5 and a litre of Kerosene by Rs. 20, he told a media conference at his Ministry yesterday.

Following a further fuel price reduction in the World Market, the Ministry brought down the fuel prices from Friday midnight. Accordingly, the price of a litre of 95 and 92 Octane petrol was slashed by Rs. 7, a litre of Lanka Auto Diesel and Lanka Super Diesel by Rs. 7 and a litre of Kerosene by Rs. 5.

Minister Yapa said the total fuel subsidy given to the consumers per litre of fuel after the two recent price reductions amounts to Rs. 12 for 95 Octane Petrol, Rs. 12 for 92 Octane Petrol, Rs. 10 for Lanka Auto Diesel, Rs. 12 for Lanka Super Diesel and Rs. 25 for Kerosene. At present, the CPC has introduced a uniform-price structure for all filling stations in the country. The Ministry has entered into long-term contracts without going for spot tenders. "We believe that the crude oil prices will remain unchanged during the first six months or next year. We hope the crude oil prices will stabilise around US$ 75 to 80 per barrel."

This year is very productive for the petroleum industries sector. After extensive discussions, Octane 90 Petrol was withdrawn and Octane 92 petrol was introduced from January 1, 2014. In August 2014 the quantity of 500 Sulphur which contained a litre of Super Diesel was reduced to 10. Sri Lanka is the only country in Asia which has 10 PPM Super Diesel, the Minister said.

The CPC has also recorded a net profit of Rs. 4 billion during the past nine months this year. We hope to earn around Rs. 4 to 8 billion as profit this year. I don't think the reduction of fuel prices will have any adverse effect on CPC profits. Whenever, we get an opportunity to pass on the benefit to consumers, we would not hesitate to do so, the Minister said.

The Minister categorically rejected the claim that the fuel prices were reduced targeting the upcoming Presidential election. When the fuel prices were reduced in September, we didn't know that there would be an election. Fuel prices are reduced depending solely on the price fluctuations in the World Market.