ECONOMYNEXT – Sri Lanka’s kerosene use has rocketed 65 percent up to August 2024, official data showed, amid subsidized pricing that has given incentives to use the aviation-like fuel for industrial and ground transport.
Kerosene sales rose 87.4 percent to 90,000 metric tonnes up to August 2024, with August volumes up 65.4 percent to 13,000 metric tonnes.
In Sri Lanka kerosene, which is similar to Jet-A1 and is most of the more expensive to import than diesel (petrol is the cheapest fuel) has been mis-priced along with diesel, discouraging the use of cheaper and cleaner petrol.
At the moment (in November) diesel is priced at 283 rupees a litre, petrol 311 and kerosene 183 rupees.
Petrol price is kept up by taxes.
As a result, some bus owners use kerosene breaking the rule for diesel driven engines.
Analysts say the government mis-pricing is driving up demand for kerosene as well as contributing to a collapse of personal integrity of the public by tempting them with wrong prices.
Kerosene mis-pricing was corrected by 2014. But from 2015 kerosene mis-pricing started again.
State-run Ceylon Petroleum Corporation has previously threatened to stop supplying kerosene to outlets that were selling kerosene to bus owners and factories.
Related Sri Lanka to crackdown on kerosene sales for transport, factories
By 2019, kerosene use had almost doubled from around 10,000 metric tonnes a month in 2014 to around 18,000 to 19,000 thousand metric tonnes.
In countries with low inflation, petrol prices are lower than diesel (diesel has a higher caloric value).
(Colombo/Nov06/2024)