MP Gammanpila - no shortage of facts on fuel

In his statement, the MP claims that (a) the Ceylon Petroleum Corporation (CPC) is incurring specific losses on the sale of each litre of Petrol, Diesel, and Kerosene, and (b) these daily losses could be minimized if the levies currently imposed are removed. 

FactCheck.lk evaluated the losses incurred by making the best estimates in relation to the fuel price formula implemented by the Ministry of Finance (MoF) in 2018 and other data published by the Central Bank of Sri Lanka (CBSL).

On the first claim regarding the loss to the CPC in the sale of a litre of 92-Octane Petrol and Auto Diesel, Exhibit 1 shows the various costs in terms of the MP’s estimates (as imputed) and estimates by FactCheck.lk. Based on the numbers estimated by FactCheck.lk there is a loss of LKR 19 for petrol and LKR 46 for diesel. The larger losses for diesel claimed by the MP, point to the pre-tax price estimation error of under 5%.

To check the second claim on the daily loss to the CPC, FactCheck.lk used the average monthly sales number reported in the last three months in 2021. Accordingly, the CPC incurred a loss of LKR 294 million per day on the sale of 92-Octane Petrol and Auto Diesel. Levies on these items were estimated as LKR 207 million per day using the current tax rates. Therefore, the MP is right that CPC would still make a loss (of about LKR 87 million), but this loss it would be more reduced loss if the levies are removed.

The minister is right on both the loss incurred by the CPC on the sale of one litre 92-Octane Petrol and Auto Diesel, and on the CPC being able to minimize/reduce its daily losses with the removal of levies imposed on these petroleum products. 

Therefore, we classify this statement as TRUE.

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment. 

FactCheck is a platform run by Verité Research. 
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