Government Weighs Holding Fuel Prices as Global Oil Market Softens

The government is considering maintaining current domestic fuel prices even after the conclusion of the existing subsidy programme, provided international oil prices continue their downward trend.

Officials said authorities are closely observing developments in global energy markets before making a final decision on the future of fuel subsidies and local pricing.

The fuel relief programme, introduced earlier this year, currently provides a subsidy of Rs. 100 per litre on Auto Diesel and Rs. 20 per litre on Petrol. Funded through a Rs. 57 billion allocation for an initial three-month period, the programme was widely expected to end in June. However, officials clarified that the duration of the subsidy will depend on how long the allocated funds remain available.

Ceylon Petroleum Corporation (CPC) Managing Director Mayura Neththikumara stated that the relief measures would continue until the full allocation is utilized and would not automatically end with the calendar deadline.

He added that any decision on extending the subsidy would ultimately require direction from the government.

According to Neththikumara, falling international oil prices have opened the possibility of sustaining existing local fuel rates without placing additional pressure on state finances. He noted that the price of a barrel of diesel had dropped to USD 125 by last Friday.

He cautioned, however, that policy decisions cannot be based on short-term market movements and that lower prices would need to remain stable over time before any lasting pricing strategy could be adopted.

At present, Lanka Petrol 92 Octane remains priced at Rs. 434 per litre, while Lanka Auto Diesel stands at Rs. 407 per litre. Premium fuel prices continue at Rs. 495 per litre for Lanka Petrol 95 Octane and Rs. 478 per litre for Lanka Super Diesel.

Authorities indicated that any future decision regarding the continuation, adjustment, or withdrawal of subsidies will depend on sustained market conditions and government direction.