Officials of the Ceylon Petroleum Corporation (CPC) have informed the Committee on Public Finance (COPF) that the government’s fuel subsidy programme is scheduled to end this month and will not continue from next month.
The disclosure was made during discussions before the Committee on Public Finance, chaired by Member of Parliament Dr. Harsha de Silva.
Responding to questions raised by the Committee Chairman, CPC officials stated that no final decision has yet been taken regarding a possible increase in fuel prices following the conclusion of the subsidy programme.
During the meeting, Dr. de Silva also questioned CPC officials on how the corporation is managing its foreign exchange requirements amid recent volatility in the foreign exchange market.
He further pointed out that there are concerns in some quarters that the CPC’s foreign currency transactions may have contributed to fluctuations in the exchange rate.
The discussion comes against the backdrop of remarks made by President Anura Kumara Dissanayake in May, when he stated that the government was considering several alternative measures, including revisions to fuel pricing, with the objective of reducing fuel consumption and managing rising import costs.
At the time, the President noted that the increase in global fuel prices had pushed the actual cost of a litre of diesel in the local market to approximately Rs. 720.
He also stated that the CPC continued to operate at a loss and that the government was providing a subsidy of around Rs. 100 per litre of diesel in order to maintain the retail price at Rs. 392 per litre.
The future of the fuel pricing mechanism and any potential adjustments are expected to be clarified in the coming weeks as authorities continue to assess global oil prices, exchange rate movements, and their impact on the country’s finances.
