By IANS,
Colombo : Although the global petroleum costs have dropped by $100 a barrel, Sri Lanka’s retail price of petrol remains the highest in South Asia, a media report said Sunday.
This is despite the fact that the government of President Mahinda Rajapaksa has slashed the price of (90 octane) petrol by Rs.35 per litre in the past two months.
With last week’s reduction of Rs.20 a litre, the petrol price in Sri Lanka is now Rs.122 in contrast to Rs.100 in India, Rs.80 in Pakistan, Rs.95 in Bhutan, Rs.73 in the Maldives and Rs.120 both in Nepal and Bangladesh, the English weekly Sunday Times said.
Auto diesel is sold in Sri Lanka at Rs.80 a litre with only landlocked Nepal and Afghanistan selling it at the same price. India, Bangladesh and the Maldives sell diesel at around Rs.75 a litre, Pakistan at less than Rs.70 and Bhutan at Rs.45.
According to the media report, the state-owned Ceylon Petroleum Corp (CPC) and the petroleum ministry have claimed that the heavy subsidy on diesel “is the main reason why the price of petrol cannot be reduced further” but some economic analysts are reluctant to accept this argument.
The CPC has also claimed that it cannot further cut fuel prices because state institutions like the Ceylon Electricity Board (CEB), Sri Lanka Railways and the armed forces owe the CPC about Rs.58 billion.
“The analysts point out that the domestic fuel price increased by 35 percent when the world market prices rose by 50 percent from November 2007 to July this year. But when world market prices fell by 70 percent from August this year, the Sri Lankan price was reduced by only around 24 percent,” the Sunday Times said.
Annually, Sri Lanka consumes about four million tonnes of fuel products. The island nation depends entirely on imports for fuel products.
On an average, the CPC sells nearly 45 million litres of petrol and 170 million litres of diesel, while Lanka IOC Ltd (LIOC) sells 15 million litres of petrol and 30 million litres of diesel in Sri Lanka a month.