By The Pulseline News Desk
Fresh pricing data released by the Ceylon Petroleum Corporation (CPC) has revealed the growing financial strain caused by maintaining fuel prices below estimated import and operational costs, particularly for diesel and kerosene products that are heavily used across the country’s transport and agricultural sectors.
The pricing structure, published for April 2026 based on data available up to April 30, provides a rare public breakdown of how imported refined petroleum prices are calculated under Sri Lanka’s fuel pricing mechanism.
The figures highlight widening gaps between formula-based fuel costs and current retail prices, underscoring the mounting pressure on state finances at a time when the government has pledged to maintain cost-reflective pricing under the International Monetary Fund (IMF)-backed reform programme.
According to the CPC, the estimated landed cost per litre stood at Rs. 273.59 for Petrol 92 Octane and Rs. 290.07 for Petrol 95 Octane. However, imported diesel products recorded dramatically higher costs, with Lanka Auto Diesel at Rs. 560.85 per litre and Super Diesel at Rs. 613.90.
Kerosene — widely used among lower-income households and fishing communities — recorded a landed cost of Rs. 550.24 per litre.
After adding processing charges, taxes, distribution expenses, dealer commissions, and other operational costs, the estimated formula-based prices rose sharply.
The CPC estimated that Petrol 92 should cost Rs. 432.59 per litre, while Petrol 95 was calculated at Rs. 477.46. Lanka Auto Diesel was estimated at Rs. 749.70 per litre, Super Diesel at Rs. 840.07, and Kerosene at Rs. 580.53.
Current retail prices, however, remain substantially lower.
Petrol 92 is currently sold at Rs. 398.00 per litre, Petrol 95 at Rs. 455.00, Lanka Auto Diesel at Rs. 382.00, Super Diesel at Rs. 443.00, and Kerosene at just Rs. 25.00 per litre.
The resulting under-recovery levels are striking.
According to the CPC calculations, the state is effectively absorbing Rs. 34.59 per litre on Petrol 92 and Rs. 22.46 on Petrol 95. But the gap becomes far larger for diesel and kerosene products, with under-recoveries estimated at Rs. 367.70 for Lanka Auto Diesel, Rs. 397.07 for Super Diesel, and Rs. 325.53 for Kerosene.
The data emerges at a politically sensitive moment for the government.
Sri Lanka has informed the IMF that temporary relief measures introduced following global fuel price increases and Middle East-related supply disruptions would be phased out by September 2026, reaffirming the administration’s commitment to cost-recovery pricing for fuel and electricity.
However, the latest CPC figures demonstrate the challenge facing policymakers.
Diesel remains central to the country’s transport system, power generation, agriculture, and industrial activity. Sharp increases in diesel prices risk triggering broader inflationary pressure across the economy, particularly in food transport and public transportation.
Kerosene pricing carries even greater political sensitivity because it directly affects fishing communities and lower-income households that rely on the fuel for cooking and lighting.
Successive governments have historically used fuel subsidies as a political and social buffer, often absorbing massive financial losses to avoid public backlash. But economists argue those policies contributed significantly to the debt accumulation and fiscal imbalances that helped trigger Sri Lanka’s 2022 economic collapse.
Under the IMF-supported reform programme, authorities have pledged to move toward market-based pricing mechanisms to prevent further losses at state-owned enterprises such as the CPC.
Analysts say the April pricing data reveals the difficult balancing act now confronting the government – maintaining fiscal discipline and IMF credibility while attempting to shield consumers from another sharp increase in living costs.
For consumers already struggling with inflation, taxes, and rising utility bills, the figures also raise an uncomfortable question — how long can the government continue to absorb such losses before another major fuel price revision becomes unavoidable?
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