Ceylon Petroleum Corporation (CPC) officials informed the parliamentary Committee on Public Finance (CoPF) that the government-provided fuel subsidies currently shielding pump prices are scheduled to end in June, Ada Derana reported on Saturday.
Responding to questions from CoPF Chairman and SJB MP Dr. Harsha de Silva, CPC officials said no decision had yet been taken regarding a fuel price increase. The testimony places the formal subsidy expiry inside the current month without a published successor framework, leaving the timing and scale of any pass-through to retail pump prices unresolved.
The disclosure aligns with President Anura Kumara Dissanayake’s May 13 statement at the Nuwara Eliya District Special Coordinating Committee, where he said the government’s objective was to reduce fuel consumption and that pricing adjustments had been considered amid rising global crude costs. The President noted that a litre of diesel cost Rs. 720 in the import-and-refine chain but was being sold at Rs. 392, with the government covering approximately Rs. 100 per litre — a position he called “not sustainable in the long term.”
The Rs. 720 cost / Rs. 392 retail gap was first publicly quantified by the Advocata Institute on May 23 and has anchored the post-Hormuz fiscal-policy debate since. The IMF has separately cautioned that prolonged fuel subsidies risk breaching cost-recovery commitments under the Extended Fund Facility, and the CBSL Governor publicly tied the subsidy track to the NIR programme targets in late May.
The CPC has been carrying ongoing losses on every litre sold below the import cost, with Energy Minister Anura Karunathilake disclosing a US$524 million fuel import bill for May alone — the highest single-month figure of the cycle. A short-term cushion of Rs. 57 billion was committed by the Cabinet in May to keep pump prices unchanged for three months. That window now closes at the same time the subsidy framework itself lapses.
Source: Ada Derana.
