Archives

No diesel, kerosene price hike

The government yesterday decided not to raise diesel and kerosene prices despite a dramatic surge in crude oil prices to nearly US$ 36 a barrel.

A government statement announced that the price rise will be subsidised to keep present prices unchanged at Rs.30 per litre (diesel) and Rs.24 per litre (kerosene).

However, petrol will cost three rupees more from tomorrow. Motorists will have to pay Rs.52 per litre of petrol.

The Ceylon Petroleum Corporation (CPC) had earlier decided to raise the prices of diesel (by Rs.1.50 per litre) and kerosene (Rs.1.20 per litre) to cover the increased costs of importing crude oil.

"Despite financial constraints, the government has decided not to pass on the increased cost of kerosene and diesel to the consumer. The government will bear the price hike and keep the prices of kerosene and diesel unchanged as at present," the Finance Ministry said.

It said the subsidy will cost the government Rs.300 million. "This measure will be reviewed after one month and will be effective only for a maximum period of two months," the statement added.

The CPC in a statement issued yesterday said the threat of war in the Middle East and the general strike in Venezuela has increased crude oil prices sharply during the last several months. There was no change in petrol, diesel and kerosene prices for the last three months. The CPC said this has resulted in a monthly loss of over 450 million.

It said that prudent financial management and administrative measures taken during 2002 reduced the cost of production and distribution.

World oil prices dashed to a 27-month high on Wednesday, boosted by Iraqi war worries and a dramatic plunge in US crude stocks to the lowest level since 1975.

New York's reference light sweet crude March contract climbed 33 cents to 35.77 dollars a barrel, the highest level since September 2000.

The price of benchmark Brent North Sea crude oil for March delivery rose 10 cents to 32.47 dollars a barrel.

"Oil prices are reflecting both an underlying tight crude and product markets and tensions in the Middle East," said Commerzbank analyst John Rigby. 

News | Business | Features | Editorial | Security
Politics | World | Letters | Sports | Obituaries |

Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
Comments and suggestions to :Web Manager