President on CPC’s diesel loss: Correct numbers, incomplete diagnosis

Fact Check

Speaking at the Nuwara Eliya District Coordinating Committee meeting, in the broader context of volatile global fuel prices, President Anura Kumara Dissanayake stated that the Ceylon Petroleum Corporation (CPC) receives LKR 492 per litre of diesel against a cost of approximately LKR 750. On this basis, he argued that CPC continues to incur a “massive loss.”

To verify this claim, FactCheck.lk consulted the Ministry of Energy’s May 2026 fuel price notification, and the May 2026 update of the Fuel Price Tracker, published by Verité Research on publicfinance.lk. The tracker calculates the full cost recovery fuel prices using the pricing formula introduced by the Ministry of Finance in 2018 on a monthly basis.

First, the president’s calculation of LKR 492 received by the CPC is correct. The president correctly cited the retail price of LKR 392 per litre under the May 2026 prices, prior to the latest market revision. The arithmetic that follows is also correct: the LKR 392 paid by consumers, together with the LKR 100 subsidy (effectively a tax refund) paid to the CPC by the government, means that the CPC receives LKR 492 per litre.

Second, the president claims that the CPC is incurring a “massive loss” on diesel. In the context of his remarks, this “massive” loss reflects the gap between the CPC’s reported calculation that it should receive LKR 750 for cost recovery, and the LKR 492 it receives. The president alluded to this cost recovery figure in his statement as approximately LKR 720. Based on this reporting by the CPC, when it receives LKR 492, the resulting loss is LKR 258 per litre.

However, the explanation for why the loss is so “massive” requires qualification.

If the CPC’s costs are calculated using the government’s fuel pricing formula and the international procurement cost based on Singapore diesel benchmark prices for April 2026, the CPC would need to receive only LKR 551 to recover all costs—not LKR 750 as it has claimed. Therefore, with the LKR 492 per litre it received in May 2026, the CPC would still incur a loss, but only one of about LKR 59 per litre. This is much smaller than the reported implied loss of LKR 258 per litre.

In sum, the evidence qualifies the president’s framing of the CPC making “massive losses.” But, the diagnosis of the very large loss implied of about LKR 258 per litre arises because the CPC’s reported international procurement cost is substantially above the relevant benchmark prices for procurement (see Additional Note). However, this qualification does not negate the president’s larger claim that the CPC made a large loss on diesel in the month of May 2026.

Therefore, we classify the president’s statement as TRUE.

Additional Note: For the CPC’s reported cost recovery price of LKR 750 per litre to align with the fuel pricing formula, the implied procurement price would have to be around USD 268 per barrel. In April 2026, however, the Singapore diesel benchmark averaged about USD 190 per barrel and exceeded USD 268 only briefly between 2 and 6 April. From 8 April onwards, the benchmark remained below USD 200 on all but one day, averaging about USD 172 per barrel. In May 2026, the benchmark eased further to approximately USD 157 per barrel month-to-date. The CPC’s reported cost of LKR 750 per litre therefore reflects procurement at a price substantially above the prevailing international benchmark during the period.

FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, FactCheck.lk will revisit the assessment if new information becomes available.