The benefit of world oil price reduction will be passed on to consumers at the next price revision if the current downward trend in global oil prices continue, Treasury sources said.
“The price was revised upward at the last revision taking into account the price based on the last four weeks average prices,” sources said.
The price of a litre of octane 92 was increased by Rs. 3 to Rs. 138 a litre on June 10. Fuel prices are revised on the 10th of every month based on the fuel pricing formula implemented since mid last year.
According to the pricing formula, if the current downward trend in world oil prices continues during the month it should be reflected in the next revision automatically.
However, energy prices in the country being tied down to politics could be subject to revision outside the pricing formula.
“The government did not revise prices fully according to the pricing formula in April and May due to the festive season. If it had implemented the pricing formula in those two months prices in June would have come down,” sources said. The fuel pricing model is primarily based on the Singapore FOB price (US$/bbl) which is the CIF price ($/bbl) and currency exchange rate (Rs/$) litres per bbl equivalent to CIF price (Rs/litre). World oil prices currently hover in the range of US$ 62-64 per barrel.