Central Bank Governor Ajith Nivard Cabraal is pushing for a fuel price revision, saying it is long overdue.
Mr Cabraal tweeted saying petrol and diesel prices in Sri Lanka are less than half that of some countries in the region.
He issued this statement at a time when the oil ship ments had arrived at the Colombo port and waiting for clearance as the Ceylon Petroleum Corporation grappling to find money to buy dollars to make payment for imported fuel harboring LCs.
Fuel prices were increased by both the Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Corporation (LIOC) in December last year. .
Earlier this month LIOC increased fuel prices further but fuel sold by the CPC remained unchanged.
Energy Minister Udaya Gamanpilla has issued a red alert for Sri Lanka saying the country may run out of fuel very soon.
Gamanpilla said that the Ceylon Petroleum Corporation (CPC) does not have money to purchase oil.
The Minister said the crisis in the CPC was as a result of fuel being sold to the public at a concessionary rate.
He proposedeither a fuel price hike or a tax revision in aletter sent to Finace Minister BAsil Rajapaksa last Friday.
He said the world crude prices have increased to an all-time high of $ 19,286 per barrel, adding that the Finance Ministry has been informed on the rising world oil market situation, but the Ministry is yet to respond.
As per the data shared, the CPC at present suffers a loss of Rs. 551 million monthly on top of Rs. 83 billion last year.
The Minister noted that the CPC pays tax of Rs. 42 is imposed on a litre of 92 Octane Petrol, Rs. 64 on 95 Octane Petrol, Rs. 17 on diesel and Rs. 39 on Super Diesel. Thereby, the Treasury receives Rs. 368 million on a daily basis as taxes from the CPC.
At the current prices, Petrol is incurring a loss of Rs. 19 per litre and Diesel Rs. 52 per litre.
He explained that failure to remove taxes or increase prices will lead to an acute fuel shortage in the near future.
Minister Gammanpila also said the Central Bank Governor informed him in writing last month, that the bank is unable to release funds to import fuel, owing to the escalating foreign exchange crisis.
He clarified that the $ 500 million credit line from India to CPC, will only be active from April.
