Sunday Times E-Paper

Fuel crisis: Supplies can be guaranteed only till January

Energy minister urges Basil to find solution as world market prices soar

By Damith Wickremasekara

Energy Minister Udaya Gammanpila has called on Finance Minister Basil Rajapaksa to find a solution to the fuel price crisis and warned that uninterrupted fuel supplies could only be guaranteed for the next two months.

Minister Gammanpila told the Sunday Times that the Finance Minister had been informed of the situation where the Ceylon Petroleum Corporation (CPC) could face financial difficulties in importing fuel if a solution was not provided.

“It has been conveyed (to Minister Basil Rajapaksa) that uninterrupted fuel supplies could only be guaranteed until January,” he said.

Mr. Gammanpila said a possible tax relief for imports or a price revision could be a solution to the issue.

The Minister said if the Lanka Indian Oil Company (LIOC) effected a price increase, it would have an impact on the CPC, as it would make more consumers to go for CPC fuel, thereby increasing its losses.

For the first nine months of this year, the CPC suffered a loss of about Rs 83 billion and the losses were likely to increase up to an unprecedented level of Rs 120 billion by the end of the year, he said.

The moves came as world oil prices settled at a three-year high, above $85 a barrel on Friday, amid forecasts of a supply deficit in the next few months as the easing of coronavirus-related travel restrictions spurs demand.

Demand has picked up with the recovery from the COVID-19 pandemic, with a further boost from power generators who have been turning away from gas and coal to fuel oil and diesel, Reuters news agency reported.

The International Energy Agency on Thursday said the energy crunch is expected to boost oil demand by 500,000 barrels per day (bpd).

In Sri Lanka, the demand for fuel is expected to rise after next Thursday as inter provincial bus services are due to begin with the lifting of a ban on travel between provinces.

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2021-10-17T07:00:00.0000000Z

2021-10-17T07:00:00.0000000Z

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