Benefit will be passed on if oil prices drop sharply - CPC chairman

by Lalin Fernandopulle

The Ceylon Petroleum Corporation (CPC) will pass on the benefit to the people if the average monthly world crude oil prices drop, said Chairman CPC, Asantha de Mel.

He said the Dubai crude oil prices have been stable during the past month and as a result the CPC cannot reduce petroleum prices. The CPC imports crude oil from Dubai at around US$ 87 per barrel.

"The CPC which incurs a loss on diesel daily cannot reduce the price. Prices were revised recently to cover the cost. The benefit of price reduction could be passed on to the consumers only if there is a sharp drop in world crude oil prices", de Mel said.

The CPC loses Rs. 12 on a litre of diesel daily while it makes a profit on petrol. The CPC increased the price of diesel by Rs. 10 per litre and Rs. 5 per litre on petrol.

The Chairman said with the oil exploration and hedging to commence shortly fuel prices will reduce. The CPC will benefit from oil hedging with the Chinese new year celebrations this month.

Secretary, Ministry of Transport Nihal Somaweera said the Transport Ministry is ready to renegotiate with the bus operators if the Petroleum Ministry is prepared to reduce fuel prices.

The National Transport Commission approved a revision on bus fares in keeping with the recent increase in fuel prices. Bus operators were permitted to increase fares by 4.6 per cent as an interim increase. According to the National policy bus fares are revised in July every year.

Director, Policy National Transport Commission M.A. Jeffry said since there is a 4 per cent increase in fuel prices an interim revision had to be approved Bus fare revisions are approved if there is a 4 per cent increase in fuel prices. Following the Rs. 9 increase on a litre of diesel last year and the revision this month bus fares need to be revised", he said.

Bus fares are revised in July on account of the 12 factors specified in the regulations.

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