COLOMBO, May 10 (Reuters) - State run Sri Lankan fuel retailer Ceylon Petroleum Corporation (CPC) will raise retail prices for gasoline and diesel from midnight on Thursday after being hit by rising oil prices, a government spokesman said.
CPC, which has around two-thirds of the country’s retail fuel market, will increase the price of gasoline by 20 rupees to 137 rupees a litre; diesel goes up by 14 rupees to 109 rupees; and kerosene oil will rise by 57 rupees to 101 rupees.
It follows Lanka IOC, the only other fuel retailer in Sri Lanka, which lifted its prices in March.
CPC had been under pressure to raise prices after incurring a loss of 9.9 billion rupees ($64 million) in the first two months of the year due to rising oil prices.
“After a long discussion, we decided to revise the prices after evaluating the global oil price increase,” Cabinet Spokesman Rajitha Senaratne told reporters in Colombo.
“With this increase it will help to reduce the losses to the CPC.”
Finance Minister Mangala Samaraweera said the cabinet approved the fuel price formula and under the formula there would be revisions in every two months.
The government cut petrol prices in January 2015 after President Maithripala Sirisena was voted into office, and has not increased prices since then, fearing unpopularity among voters.
Lanka IOC, a subsidiary of Indian Oil Corp, raised its prices on March 24 after incurring a cumulative loss of 1.3 billion rupees in the last four quarters.
Lanka IOC’s prices will be lower than CPC’s after Thursday’s increases, but Lanka IOC Managing Director Shyam Bohra said they are likely to go up again.
“Definitely prices will be increased because internationally crude oil is at a peak for the last few years,” he told Reuters.
Under pressure from the International Monetary Fund to boost revenue, Sri Lanka’s government increased the excise duty on diesel by 10 rupees to 13 rupees per litre from August last year, but asked fuel retailers not to pass on the cost to consumers. ($1 = 157.7500 Sri Lankan rupees) (Reporting by Ranga Sirilal Writing by Shihar Aneez; Editing by Susan Fenton)