Fuel prices cannot be reduced haphazardly

WEDNESDAY, 17 SEPTEMBER 2014

The Minister of Petroleum Industries Anura Priyadharshana Yapa at a government media briefing on the 15th said the fuel prices could not be reduced in Sri Lanka despite the prices in the world market went down. However, even before 24 hours passed since the Minister of Petroleum Industries made this statement the President suddenly reduced the prices of fuel and electricity.

According to President’s statement electricity bill would be reduced by 25%, the price of diesel by Rs. 3 a liter, kerosene oil by Rs.20 a liter and the price of petrol would be reduced by Rs.5.

The President made this sudden announcement when the result for the government at Uva PC election is expected to be a precarious one.

However, speaking regarding the existing reality at the government media briefing the Minister of Petroleum Industries had said, “Fuel market is an unstable market. Despite the prices in the world market going down, the prices in the local market cannot be reduced. If we are to introduce a formula for fuel prices we would have to withdraw from the fuel subsidy system. If a formula for fuel prices is introduced while the subsidy scheme is present the prices of fuel would go up by 100%.”

This indicates that even cabinet ministers are not aware of the trump cards the President attempts to play to wriggle out of the perilous situation the government is stuck in the Uva PC election.

If the prices could be reduced why did the government wait until the final stages of the election campaign asked an economist adding how many millions people would have spent for the overpricing of fuel and electricity. He said the funds thus collected by the government should be calculated and people should question the government regarding what happened to the amassed funds.