By: Staff Writer
Colombo (LNW): Power and Energy Minister Kanchana Wijesekera has announced that the Government is exploring the possibility of implementing automated fuel price revisions daily by fuel distributors starting in 2024.
Speaking at the annual general meeting of the Petroleum Shed Owners Association 2023 on Saturday, he emphasised that this initiative reflects a long-term policy envisioned by the Government.
In a significant move towards ensuring a more transparent and responsive energy market, he said: “This is a crucial step in creating a more dynamic and efficient fuel pricing system that benefits both consumers and the industry.”
The Minister highlighted the pressing need for such a policy change in light of the ongoing conflict in Gaza, which has led to heightened market volatility.
He explained that it is anticipated that fuel prices may surge by up to 25% due to geopolitical tensions, underscoring the importance of proactive measures to stabilise prices.
Wijesekera assured the public that the Government has taken pre-emptive steps to safeguard fuel stocks amidst these uncertain times.
“We have made sure that we are well-prepared to handle any potential disruptions in the fuel supply chain. Our strategic reserves are in place to ensure stability even in the face of external challenges,” he added.
Industry experts said the proposed daily automated fuel price revisions would enable distributors to respond swiftly to market fluctuations, providing a more accurate reflection of global oil prices.
This move is anticipated to bring about increased efficiency and competitiveness within the industry, ultimately benefiting consumers.
They noted that the move aligns with international practices in many developed economies, where daily fuel price revisions are already in place.
The dynamic fuel pricing a common practice internationally will replace monthly fuel revision system in accordance with the pricing formula now in force using fortnightly average, international oil prices and rupee- US dollar fluctuations.
The daily price change will remove the high hike in rates that need to be effected at the end of the month and consumer will be more aligned to market dynamics, the power and energy ministry said.
CPC fuel filling stations will be automated to automatically update centrally, besides technology also provides to schedule the oil price change at midnight, he said adding that the new system will be implemented in selected petrol sheds as pilot project.
At the non-automated petrol pumps, dealers would get the updated price by way of four customised SMS’, e-mails, mobile app and web portal. “
These means of communication are also available to dealers of automated petrol pumps,” he disclosed.
