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Friday, September 25 2026
Friday, September 25 2026
MONETABRIEF – International refined diesel prices are up 92 percent and petrol 78 percent since the February 2026 with the latest spike and a decision on how much to subsidize will be made soon by Sri Lanka authorities, an official said.
Refined fuel prices can go up faster than crude prices due to expanding crack margins and also freight costs.
"The government has decided they will give a subsidy," Chairman of Sri Lanka's state-run Ceylon Petroleum Corporation D J Rajakaruna said.
"How much will the government give as a subsidy and how much will the public be impacted will be decided over the next week."
"You saw in recent days other petroleum companies curtailing distribution saying they are making losses."
R M Pak, a private distributor has said they are losing 173 rupees on a litre of diesel, and 38.5 rupees on petrol based on their landed cost.
Sinopec has said they are losing 192 rupees on diesel and 67 rupees on petrol.
IOC has said they are losing 136 rupees on diesel and 67 rupees on petrol.
CPC was losing around 80 rupees on diesel.
The CPC has the crack margin from crude and crude is also lightly taxed compared to refined products.
"It has come to a point where distributors cannot run without a subsidy," Rajakaruna said.
Based on their agreements at the time of privatization, if directions are given to sell at lower prices, the loss has to be made up by the government, he said.
If the government pays a subsidy, taxes taken from the people through income tax or value added tax will be given to businesses or vehicle owners using diesel.
The International Monetary Fund has said any subsidy must be time bound and targeted as much as possible.
Unlike foods, which are charged very high import taxes in Sri Lanka, fuel use go up with income.
The higher income brackets, tourists , use more energy in all countries including Sri Lanka. (Colombo/Sept24/2026)
| 3 month bill | 9.22% | 22bp ▼ |
| 12-m bill | 9.91% | 10bp ▼ |
| Gold (Ounce) | $4602 | - - |
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