The present administration now mainly focuses on enhancing renewable electricity generation mix having considered not only the financial benefits but also the possible economic and environmental impacts emerged in the medium term.
This cannot simply be achieved only through CEB and CPC but it requires overarching policy actions that addresses cross sectoral issues as well.
It is in this background that the government has introduced the Fuel Price Stabilization Fund (FPSF), to ensure that the benefits of low oil prices, currently prevailing is shared across the board in a more equitable manner specially in this time of lockdowns and social distancing.
The FPSF will be key in the maintenance of the fuel prices in a more stable manner thus supporting industries more effectively.
It is also envisaged that this FPSF will prevent potential pressures to the government budgetary operations and will continue to facilitate the energy sector while ensuring a more effective transmission of the compressed global fuel prices into the macro economy
The government while maintaining the retail prices of petrol and diesel unchanged, has imposed a fuel surcharge on the imports of petrol (octane 92), petrol (octane 95), super diesel and auto-diesel and the surcharge is routed to the FPSF.
This has allowed the Ceylon Electricity Board (CEB) to settle its dues to the tune of Rs. 48 billion out of around Rs. 85 billion of dues as at end December 2019.
Ceylon Petroleum Corporation (CPC) in turn was able to settle a portion of its dues to the two state banks, thus not only improving the balance sheet and the cost structure of both CEB and CPC but also improving the liquidity position of the two State Banks.
(LIN)