The Ceylon Petroleum Corporation says there will be no sudden increase in fuel prices this month despite the sharp rise in world oil prices, NewsFirst reported.
CPC Chairman D.A. Rajakaruna said the Corporation is currently studying a revision of local fuel prices in line with global prices.
The two halves of that statement
The assurance and the caveat sit close together. “No sudden increase” rules out an abrupt move; a revision “in line with global fuel prices” is precisely what a rising crude market would produce. Rajakaruna did not say when a revision might take effect, by how much, or which grades it would cover.
The pressure behind it
The statement is the first response from the state fuel supplier to a crude rally that has run for more than a week. Brent briefly passed $108 a barrel on Thursday, its highest since May, closing at $107.63 after a 6.3% single-session jump. Both Brent and West Texas Intermediate are up more than 75% since the start of the year, driven by the Iran conflict and, more recently, a collapse in Strait of Hormuz shipping traffic.
Domestic pump prices have so far moved the other way. Ceypetco cut petrol prices on 30 August — Petrol 92 down Rs. 15 to Rs. 399 and Petrol 95 down Rs. 20 to Rs. 475, with diesel, Super Diesel and kerosene left unchanged — and reduced furnace oil and naphtha on 4 September. Those cuts were priced off a cheaper barrel than the one the Corporation is buying now.
What is still unanswered
Neither the Corporation nor the Energy Ministry has published what the rally is costing the CPC’s import bill, what its current stock cover is, or whether the Treasury is absorbing any of the difference.
Update: Hiru News confirms the statement — and reports private stations are restricting diesel
A second newsroom has now filed the Chairman’s remarks, and its account carries two things the first did not: a date for the price decision, and a supply problem already visible at the pumps.
Prices are scheduled to be reviewed at the end of this month, Hiru News reported. That converts the open-ended “revision under study” into a timetable. Rajakaruna added that any future increase would be announced following discussions with the government — placing the decision outside the Corporation’s sole control.
The more consequential detail is downstream. Private fuel distributors have restricted diesel distribution, Hiru reported, citing losses incurred under the existing fuel price calculation formula. Hiru’s reporters observed “No Diesel” signs at several filling stations.
D.V. Shantha Silva, Executive Director of the Petroleum Distributors Association, said private companies had restricted diesel sales because the pricing formula was leaving them out of pocket. Rajakaruna said Ceypetco stations hold sufficient stocks.
That is the mechanism worth watching. A pricing formula held below import cost does not simply postpone a price rise; it pushes the loss onto whoever sells at the capped price. Private distributors, unlike the state Corporation, have no Treasury behind them — so they stop selling. The assurance of no sudden increase and the appearance of “No Diesel” signs are two faces of the same decision.
Hiru also puts the market slightly lower than the peak, with crude easing about USD 3 to USD 104 a barrel at the previous close and WTI at USD 100. Rajakaruna described the war-related developments as having created “a dangerous situation,” with diesel, petrol and crude all rising sharply.
One discrepancy
The two reports give the Chairman different initials — NewsFirst has D.A. Rajakaruna, Hiru has D.J. Rajakaruna. Our 7 September archive also carries D.J. The surname is consistent across all accounts; the initials are not, and no outlet has been treated here as authoritative on them.
Still unanswered
Neither report says how many stations are affected, how long the diesel restriction has been running, which districts it covers, or whether the Corporation has been asked to supply private retailers directly. Nor does either say by how much the formula is understating cost, or whether the end-of-month review will change the formula itself rather than just the pump price.
