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Sri Lanka has sent out feelers to the Indian government for fresh round of supplier credit, as soaring world crude prices pushes fuel subsidy payments to US$ 200 million this year. With a presidential poll due this year, the Sri Lankan government is resisting a retail fuel price hike. But state-run Ceylon Petroleum Corp or CPC says a monthly price adjustment is needed to keep pace with galloping crude prices.
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"If the government does not revise prices, the Treasury has to pick up the difference through subsidy payments," CPC Chairman Jaliya Medagama told reporters on Tuesday.
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The Treasury had paid out US$ 145 million as fuel subsidy payments last year to CPC. "If oil prices remain where they are now, I think the subsidy bill will go up to Rs. 20 billion (US$ 200 million) and possibly more if the oil price goes beyond current levels," Medagama said.