Introduction to the Formula Based Pricing System of Auto Fuels 1, Construction of Pri ing Formula The Cabinet of formula based pri inisters has granted approval for implementation of a cost reflective ing system of Auto Fuels effective from May 11, 2018. The Pricing Formula was constructed by a Technical Committee based following components of the supply of auto fuels a) — Landed Cost b) Processing Cost ©) Administrative Cost d) Taxation Accordingly, the Maximum Retail Price (MRP) of the auto fuels was established as follows: MRP=Vit V+ V3+Vs Where; MRP = Maximum Retail Price of Auto Fuel ‘Vi = Landed Cost (Rs. / Litre) Which includes Singapore Platts Price per Barrel, Weighted Average Premium per Barrel, Loss due to the Evaporation and Exchange Rate (USS) / LKR are applied. V2 = Processing Cost (Rs. / Litre) Which includes Local Port Charges, Transport Cost, Dealer's Margin including losses due to Evaporation to Dealers and Stockholding Cost ‘Vs = Administrative Cost (Rs. / Litre) ‘Which includes Administrative Expenses including Personnel Cost, Depreciation, and other cost elements, if any. Va = Taxation (Rs. / Litre) Which includes Customs Import Duty, Excise Duty, Ports and Airports Development Levy and Nation Building Tax. Note: According to the above pricing formula, Singapore Platts per Barrel and Exchange Rate are two uncontrollable variables. Other components are either controllable variables or fixed components2. Application of the Pricing Formula {As per Maximum Retail Price of Petrol, released effective from October 10, 2018, the value and percentage of the above components of the Pricing of Petrol (92 Octane and 95 Octane) are summarized as follows: No ‘Components Petrol 02 Petrol (95 Octane) Octane) Value [| % [Value | % 1 Landed Cost (Rs. / Litre) (Vi ) 93.84 | 59.68 97.85 57.77 2 _| Processing Cost (Rs. / Litre) (Va) 3.87|_3.74| 625| 3.69 3__[ Administrative Cost(Rs./ Lite) (Va)| 3.83 | 2.44 | _4.00| _ 2.361 + _| Taxation (Rs. /Litre) (Vs) 33.68 34.14| _61.27| 36.18 z Total 157.22 | 100.00 | 169.37 | 100.00 ‘As per Maximum Retail Price of Diesel, released effective from October 10, 2018, the value and percentage of the above components of the Pricing of Diesel (Auto Diesel and Super Diesel) are summarized as follows: No ‘Components, Diesel (Auto) | Diesel Super) Value | _% | Value | % 1_| Landed Cost (Rs. / Litre) (Vi) "99.95 | _74.56| 99.53] 70.83 2 ing Cost (Rs./Litre) (Va) | 458 341] 4.73{ 337 3 trative Cost (Rs./Litre) (Vs)| 4.05 | 3.02[ 4.03 [2.87] 4_| Taxation (Rs. /Litre) (Vo) 35.48 | 19.01] 32.21 [22.93 Total [134.06 | 100.00 | 140.50 [100.00 3. Comparison of Taxation on Petrol and Diesel as of October 2018 in Selected Countries Cc on Petrol 1_|[ India 82.14 (43%) 57.52 (33% 2 _| Pakistani? 29.93 (38%) 49.68 (58%) 3_| Sri Lanka* 53.68 (34%) 25.48 (19%) 4__| Singapore 30.78 (11%) 27.08 (12%) 5__| United Kingdom 178.70 (61%) 180.27 (60%) | *Tax Rate on Petrol (92 Octane) and Diesel (Auto Diesel) # As of July 2018Sddwm Qude wew Se Qs Sawom B8o8 2 sem® asosian Smee 8Ede m&sdOa 2018 OB Oe 11 & BO AQNOTEOD v82 dodwOD gutdm equ BBOa ENO Se Baw H80® Se gam wag Mm So Qe Be cae. Be Qe wewos cep Cdod ddds10D Quid EEO oHo® F By Om son AwdGos aeAGed of8H. 6 vem mule &a m8Q0s ost 5 Se age wHgwO ogo C2. Se gQe agus ogn® moni cbam Se ape MRP=Vi+Vii+Viii+Viv C889 BEES Be (MRP) = Odrs embBSrm BBO (Vi) + oy9Bo 880.0 (Vii) + eBeacm 880.0 (Vill) + dg B8O.2 (Viv) V i) Oded CMOHArvw® BBOjs 288 8 Adcas wan Ba¢® Om Bodgged sede Se (Platt’s Price) c@x1® OxdsBO wo G Bue YOO, OS® 6 MCB Doss. (Vii)ejmBe® B80, eyaBe® Huc@Oecd odBo Oe ody, yOwn mds, Og BousSamed 0908 wy O28458 OHO oso deDs OBo® Bag® ¢ HRETS. (Vili) sSe0e= B8O10 @® 200 ode O1Qs 2m OH oB&HeEmOe Bug® ¢ GBsee gow gOgOH8O ¢ gQkO gongs qunAn Bag® ¢ gaEst od. (V iv)ag 830;0 Sd gaxtdstost oq Mnun A, Oda BH Qdat omgsE wD ag, HAs eordBs Boo Ag O/H Ag o058a. gun gdam 4 émnedss dddww guidm ¢859 ded Se (Maximum Retail Price) S550 8. gon Be gge Gaston B808 2 Body (Platt’s) dean Be cosio SBsed yh OovimO cOnwSO mens mE orm BOcvass oD, cons Qanud acne me veh dov0s 80 0.