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Central Bank of Sri Lanka calls for reforms in country's energy sector
Thu, Apr 15, 2010, 10:22 am SL Time, ColomboPage News Desk, Sri Lanka.
Apr 15, Colombo: The Central Bank of Sri Lanka has highlighted the need for reforms in the energy sector including a price formula to match import costs to retail prices.
"A realistic pricing formula needs to be developed to price petroleum products in the local market and the prices should be adjusted at reasonable intervals based on movements in the international oil prices," the Central Bank has said in its annual report.
According to the Bank, the state Petroleum Corporation has lost Rs. 12.3 billion in 2009.
Both the Ceylon Petroleum Corporation (CPC) and Ceylon Electricity Board (CEB) borrow heavily from banks to cover losses when prices are artificially held down.
"The persistently high outstanding liability of the CEB to the CPC has made the CPC to borrow substantially from the banking system thereby crowding out lending to the private sector while impacting on market interest rates," the Central Bank has said in its report.
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