President Anura Kumara Dissanayake says the government’s objective is to reduce fuel consumption, and that recent decisions, including fuel price increases, have been taken with that goal in mind.
Speaking at the Nuwara Eliya District Special Coordination Committee meeting, the President said that due to rising fuel prices in the global market, the actual cost of a litre of diesel in Sri Lanka has increased to Rs. 720.
However, he stated that the government is currently absorbing Rs. 100 per litre and supplying diesel to the public at Rs. 392, while the Ceylon Petroleum Corporation is also continuing to incur losses. He emphasized that such a system cannot be sustained in the long term.
Further elaborating, the President said:
“In February, we spent USD 98 million on oil imports. In March, we spent USD 216 million. In April, we spent USD 368 million. In May, we calculated that we will spend USD 522 million. Compared to February, more than six times more oil has been imported. We have to manage the economy amid several challenges.
If we look at oil costs, the Ministry of Petroleum had stated that the price of a litre of diesel would be approximately Rs. 720. But a litre of diesel is being provided for Rs. 392. The government bears a cost of Rs. 100, meaning the Petroleum Corporation receives Rs. 492. Even then, the corporation is facing significant losses. Those losses need to be covered.
The government has suffered major losses through the Petroleum Corporation because previous governments failed to manage it properly. The loss stands at Rs. 84 billion, and the corporation has been taken over by the Treasury.
The electricity sector is facing a similar situation. The rise in oil prices has had an impact. We will provide some relief there as well. While electricity tariffs increased by 18%, the expected 95% increase did not take place. Instead, electricity bills increased by around 5%.
However, we cannot continue operating the Petroleum Corporation and the Electricity Board by continuously providing funds from the Treasury. These institutions must be made efficient. We must manage other sectors in a way that benefits the people.
There is a clear goal to reduce fuel consumption. If fuel prices continue to rise while consumption remains unchanged, the outflow of dollars will also increase. Therefore, we have taken certain decisions to reduce consumption to some extent. We are working to provide solutions regarding fuel as soon as possible.”
