Former Minister of Electricity and Power Kanchana Wijesekera has clarified recent claims surrounding fuel pricing, stating that there is no agreement preventing the government from adjusting oil taxes. He emphasized that the Ceylon Petroleum Corporation (CPC) operates independently in setting fuel prices, following a price formula that aligns with global market rates, and is not obligated to adhere to other companies’ pricing decisions.
In a statement posted on his Twitter account, Wijesekera dispelled rumors that the previous government had signed any agreement mandating compensation to oil companies for losses due to subsidized sales. According to him, if the government approves a fuel subsidy, only then would it need to cover any losses incurred by the CPC and other companies through treasury funds. This system is intended to protect companies like the CPC, which may sell fuel below production costs to consumers when the government deems it necessary.
The minister’s remarks underline that CPC’s profit and loss factors are built into the price formula, enabling flexibility in fuel pricing. However, any decision to sell at lower rates for consumer relief requires direct treasury support to make up for the difference, thus alleviating any burden on the corporation itself.
