Such revisions are imperative to ensure that domestic fuel prices remain above cost recovery levels for Ceylon Petroleum Corporation (CPC), Finance Ministry sources said.
The Government may need to compensate CPC on the basis for noncommercial obligations in order to keep the domestic fuel prices below the cost recovery to ease the burden on the pubic, a senior official said.
The CPC’s operational and overall losses increased to Rs. 11,143 million and Rs. 21,178 million, respectively in the first four months of 2019.
This was due to the increased international oil prices combined with the absence of pricing mechanism for the products used in aviation and power generation sectors and kerosene, he explained.
The depreciation of rupee during the period has also impacted adversely on the CPC’s performance in terms of increasing their importation cost and the dollar-denominated payable to banks.
The overall exchange loss of CPC for the period was Rs. 9,147 million.