The controversial Rs. 50 tax on every litre of petrol and diesel will remain in place until a massive debt owed by the Ceylon Petroleum Corporation (CPC) is fully repaid, Minister of Power and Energy Kumara Jayakody said yesterday (11) during an interview on Derana 360, hosted by Kalindu Karunarathne.
Jayakody explained that the levy—imposed during the previous administration—was introduced to settle an Rs. 884 billion debt the CPC owed to local banks, later taken over by the Treasury. He confirmed that over 30–40% of the debt has already been repaid, but stressed that the special levy “cannot be reduced until this loan is fully repaid.”
This position stands in contrast to the pre-election pledge of the current President, who, while in opposition, criticised the tax and described it as a “good move” (“මරු වැඩේ”) that should be abolished within a short period after coming to power. Jayakody acknowledged the political promises but noted that “everything said in opposition cannot be done after coming to power.”
The Minister attributed the CPC’s massive debt to long-standing inefficiencies, a failure to make necessary operational reforms, and overstaffing. These weaknesses, he said, created a financial burden that made the tax unavoidable.
While the levy continues, Jayakody said the government is implementing reforms within the CPC to improve efficiency and profitability, including expanding into ventures such as supplying fuel to ships. However, he clarified that profits from these activities currently cannot influence the fuel price formula.
Jayakody also pointed to changing trends in energy consumption, emphasising the need to increase electricity usage and reduce petrol dependence as more people switch to electric vehicles. The government’s strategy, he said, is to maintain a price “cushion” to protect consumers from sudden global fuel price shocks.
Despite criticism over the continued tax, Jayakody insisted that changes will be made in a way that does not create further hardship for the public, and that once the debt is settled, the benefits will be passed on to consumers.
