CPC Sells Diesel at Rs. 392 Despite Rs. 528 Production Cost, Chairman Reveals

The Ceylon Petroleum Corporation (CPC) has disclosed that it is currently selling diesel at a significant loss, with the actual cost of the fuel standing at Rs. 528 per litre while consumers are being charged just Rs. 392 — a gap of Rs. 136 per litre that is being absorbed by the state energy entity.

Widening Gap Between Cost and Pump Price

CPC Chairman made the revelation as the corporation sought to explain the rationale behind the latest upward revision in domestic fuel prices. According to the chairman, the price adjustment was made necessary by a sharp rise in the underlying cost of procuring and supplying fuel to the local market, driven by fluctuations in global oil prices and related operational expenses.

Despite the revision, the selling price remains well below the actual cost, meaning the CPC continues to bear a substantial financial burden on every litre of diesel sold across the country.

State Entity Under Financial Strain

The disclosure underscores the ongoing financial challenges faced by the CPC, which has long struggled with mounting losses linked to subsidised fuel pricing. The corporation, which is responsible for supplying a significant portion of Sri Lanka's fuel needs, has previously accumulated billions of rupees in debt partly as a result of selling fuel below cost.

• Current diesel selling price: Rs. 392 per litre
• Actual cost of diesel: Rs. 528 per litre
• Loss per litre borne by CPC: Rs. 136

Implications for Consumers and the Economy

While consumers benefit from the lower pump price in the short term, economists and energy sector analysts have repeatedly warned that sustained below-cost fuel pricing places enormous pressure on state finances and can hinder Sri Lanka's broader economic recovery efforts.

The latest increase in domestic fuel prices was mainly driven by a sharp rise in costs, yet the selling price still falls far short of covering what the CPC actually spends to bring fuel to market.

The revelation is likely to reignite debate around fuel pricing policy in Sri Lanka, with stakeholders divided between protecting consumers from higher living costs and ensuring the financial sustainability of state energy institutions. The government has yet to indicate whether further price adjustments are being considered in the near term.

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