COLOMBO Feb 23 Sri Lanka raised the price of
fuels to record levels on Saturday to prevent the state-owned
oil firm suffering further losses due to increased global oil
prices and a reduction in Iran crude imports, an official said.
Ceylon Petroleum Corporation (Ceypetco) raised the price of
a litre of gasoline by 1.9 percent to 162 rupees ($1.27)
and diesel by 5.2 percent to 121 rupees, both to record highs in
the local currency.
The price hikes come after a recent International Monetary
Fund mission emphasized the need to move towards cost recovery
pricing to place Ceypetco on a sustainable footing.
"Last year, we (Ceypetco) made a loss of 89 billion rupees
($698.59 million), so we thought to do away this loss by making
an adjustment to prices in a small margin," Petroleum Minister
Anura Priyadarshana Yapa told reporters in Colombo.
Yapa, however, said Ceypetco would still subsidise 10 rupees
in each litre of diesel and 23.96 rupees a litre of kerosene
despite the price increase.
Sri Lanka also faces constraints in importing cheap crude
oil from Iran in the face of sanctions on Iran imposed by the
United States because of its nuclear programme.
Sri Lanka's only 50,000 barrel-per-day refinery is designed
predominantly to refine Iranian light crude, though crudes from
Oman and Saudi Arabia can also be refined at a lower refining
"(With) Oman blend, our yield is low compared to Iranian
light. When our refinery is designed for particular crude and
when we can't get that...there is a 20 percent reduction in the
yields," he said.
Sri Lanka's only private sector fuel retailer, Lanka IOC PLC
, a subsidiary of Indian Oil Corporation Ltd,
also increased its gasoline price in line with the state-run
firm. It had already raised its diesel price to 121 rupees.
In December, Sri Lanka raised gasoline prices by 6.7
($1 = 127 rupees)
(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Nick