{"id":82086,"date":"2018-10-18T06:05:28","date_gmt":"2018-10-18T13:05:28","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=82086"},"modified":"2018-10-18T06:05:28","modified_gmt":"2018-10-18T13:05:28","slug":"fuel-pricing-formula-revealed","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2018\/10\/18\/fuel-pricing-formula-revealed\/","title":{"rendered":"Fuel pricing formula revealed"},"content":{"rendered":"
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Courtesy Adaderana<\/em><\/span><\/h2>\n

Sri Lanka\u2019s much-talked about Fuel Pricing Formula was revealed in detail to the media by Minister of Finance and Mass Media Mangala Samaraweera, at a press conference in Colombo today (18).<\/p>\n

The Cabinet of Minister had granted approval for the implementation of a cost reflective formula based pricing system of auto fuels effective from May 11, 2018.<\/p>\n

The pricing formula was constructed by a technical committee based on the following components of the supply of auto fuels:<\/p>\n

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  • Landed Cost<\/li>\n
  • Processing Cost<\/li>\n
  • Administrative Cost<\/li>\n
  • Taxation<\/li>\n<\/ul>\n

    Accordingly, the Maximum Retail Price (MRP) of the auto fuels was established as follows:<\/p>\n

    MRP = V1 + V2 + V3 + V4<\/strong><\/h2>\n

    Where;<\/p>\n

    V1 – Landed Cost (Rs.\/Litre)<\/strong><\/p>\n

    Which includes Singapore Platts Price per Barrel, Weighted Average Premium per Barrel, Loss due to the Evaporation and Exchange Rates (US$) \/ LKR applied.<\/p>\n

    V2 – Processing Cost (Rs.\/litre)<\/strong><\/p>\n

    Which includes Local Port Charges, Transport Cost, Dealer\u2019s Margin including losses due to evaporation to dealers and stockholding cost.<\/p>\n

    V3 – Administrative Cost (Rs.\/Litre)<\/strong><\/p>\n

    Which includes administrative expenses including personnel cost, depreciation and other cost elements, if any.<\/p>\n

    V4 – Taxation (Rs.\/Litre)<\/strong><\/p>\n

    Which includes Customs Import Duty, Excise Duty, Ports and Airports Development Levy and Nation Building Tax.<\/p>\n

    Note:\u00a0<\/em>According to the above pricing formula, Singapore Platts per Barrel and Exchange Rate are two uncontrollable variables. Other components are either controllable variables or fixed components.<\/p>\n