Fuel prices will be reduced when world prices drop - PM | Daily News

Fuel prices will be reduced when world prices drop - PM

Fuel prices had to be increased because the price of a barrel of oil had increased by 41 dollars since 2016 in the international market. As soon as the prices decrease in the international market, that benefits will be passed on to the people, Prime Minister Ranil Wickremesinghe said.

The Prime Minister was addressing a Janahamuwa at Hikkauwa on May 12, after opening a new building of the Hikkuaduwa Divisional Secretariat.

The Prime Minister said he wished to delve on the fuel price increase because it had became a burning issue in the country. The Ceylon Petroleum Corporation increased fuel prices last Thursday. Earlier, they acted according to the prices prevailing in the international market.

“But, although the previous regime increased local prices when the prices increased in the international market, it did not reduce prices corresponding to the decrease in prices in the international market,” the Premier said.

The Prime Minister said they had no control over fuel prices in the international market, but he and President Maithripala Sirisena had both agreed that when prices decreased in the international market, that the benefits should be passed on to the people as a relief.

“In 2014, the price of a barrel of crude oil in the international market was 55 US Dollars. But local prices were not reduced then. But when they came into power they reduced the price of a litre of petrol to Rs. 117. By 2015, a barrel of crude oil had comedown to 35 US Dollars. This enabled the Ceylon Petroleum Corporation to reduce fuel prices,” he said.

“But by 2017, the price of crude oil started escalating in the international market. By mid 2017 it was 67 US dollars, and by May 11, it had shot up to 77 US dollars a barrel. As such, we had to pay an enormous sum of 77 US dollars per barrel instead of the earlier 35 US dollars.”

“Consequently, a price of a barrel of crude oil had increased by about 41 US dollars by now. This was twice the price which was obtained in 2015. This forced the government to increase fuel prices on a limited scale. There is much debate in the country about the price of Kerosene. It they reduced Kerosene prices it will be used for vehicles in place of diesel,” the Prime Minister added.

“This would consequently decrease diesel sales and income while kerosene use would create mechanical defects in vehicles. That was one reason why the price of Kerosene was increased but the Ceylon Petroleum Corporation had been directed to issue Kerosene to fishermen and Samurdhi families with out electricity at a subsidised price.

“The CEB and SriLankan Airlines owed the Ceylon Petroleum Corporation as outstanding bill amounting to nearly Rs. 70 billion. Whether they would be able to settle these bills in a short time was questionable.”

“That was why the government increased fuel prices as a measure to fill the gap of outstanding bills and to recover the loss crated by an increase in price in the would market state income was insufficient to service debts obtained in 2013 and 2014,” the Prime Minister added.

“After the government assumed power it was able to service the debts at least though financial management and utilise other finds for development work. As the government introduced economic stability it had to face the Meethotamulla garbage dum problem, floods, drought and other natural entire agriculture industry was hampered by the drought expensed in certain areas development were still in progress in flood affected Galle and Matara district. Due to the expenditure the Ceylon Petroleum Corporation could not be assisted through the Budget or state income,” the Premier said.

“Already, certain entrepreneurs were accusing the government saying bank interests were too high. What would you have done if bank interest was increased by another 5 or 7 per cent. Instead of going in for such harmful actions we settled for an increase in fuel prices as an alternative measure, similarly fuel prices would also be decreased when there was a decrease in prices in the international market,” the Prime Minister said.

The Prime Minister said that when prices decreased in 2015, the government passed on the benefit to the people. Although prices increased in 2017, they continued to supply oil at reduced rates there by incurring a loss. But, since prices had escalated to unexpected levels the Petroleum Corporation could not continue to cushion the effect by providing fuel at reduced prices.

“If state funds were used to set off Ceylon Petroleum Corporation losses, it would jeopardise development work of a number of development projects already launched in the Galle district.

No Trade Zone had been launched in the country after the Koggala Trade Zone. Now, the government is taking steps to set up an Industrial Zone in the Charlemount estate in Weligama. It would also have a IT Centre,”Prime Minister Wickremesinghe said.

“Funds had been obtained to establish a massive tourism industry on a 1,800 acre plot of land in Deddwwa as revealed by Minister Gayantha Karunatilleke. This means that the Galle region would get three Tourist Zones and one Trade Zone. Another Trade Zone would be set up on 400 acres in Kalutara,” the Prime Minister said.

“Funds had to be spent on the Hambantota Trade Zone too. Unless funds were used for development projects, the country would not achieve progress. When there are opportunities to raise funds, they should use them for development work,” the Premier said.

The Prime Minister also opened new buildings at the Habaraduwa, Akmeemana and Gonapinuwala Divisional Secretariats and also inaugurated the Gonapinuwala water supply scheme. 


There are 4 Comments

It is amazing that Sri Lankans think that they can have petrol or diesel at BELOW WORLD MARKET PRICES. The country/government has to buy oil internationally at World Market Prices, say $100 for a barrel of oil costs. We pay the oil producing countries (usually in the Middle East) the $ 100 but then sell it locally for $60. The shortfall (subsidy) of $40 has to come from ALL TAXPAYERS in Sri Lanka, including villagers who do not use petrol or diesel. Every time a villager buys a cup of tea or a packet of sugar in the boutique he has to pay the VAT (tax). So the villager and every tax payer in Sri Lanka is subsidising the rich Middle East oil producers.

Talking Shop! Fuel and other prices increased due to mismanagement of the economy. Spending time and effort to cling on to political power instead of concerntrating on key economic issues. Orchestrating scams to rob the bread of the poor. With avenues to steal the peoples wealth now closing attempting to rob the funds of the Samurdi under false pretexes. It will be a matter of time for the balloon to burst and the Govt go into limbo. You cannot fool the people all the time.

The people look to the govt to lower prices. They thinks that the SL govt set the world oil prices. $ that could go to development go to subsidies fuel prices. not sure what the logic behind the practice.

PM is beating among the bush bringing in arguments to support the cause for increased fuel prices. It is known that the International price for fuel has increased. The market conditions determine prices. Taking refuge under this reaction to increase prices is a crime against the people when local taxes are imposed to buffer the mismanagement of the economy and harness funds to a sagging economy.. The people are made the victims for the ills of government. Over the last three years the country has faced unprecedented episodes of strikes by the important sectors such as Higher Education. Agriculture, Fisheries, Transport etc., In the latest move one finds that even a Free Trade Agreement cannot be entered into without inclusion of dissadvantageous clauses. All these actions have had and are creating a crippling effect on the lives of people. Some of whom cannot even manage a single daily meal. The prices of food and other essentials will now incease further as economic mismanagement and an eroding ruppee plus stealing the bread of the poor to feed the appetite of Ministers of state both within and out of parliament continues. The exhorbitant costs of running the legislature and local authorities with increased heads adds to the burdens and remapns uncontested even by the opposition as they share the perks. The inefficiency of government pervades and adds to the misery of a suffering people. Never in the history of the last 70 years of independence has the country been reduced to such a low level. The loss of confidence of the people is not reflected in a orchestrated win of the no confidence motion as the same group endorses a crooked legislation for reasons best known. ::" You can fool the people some time but you cannot fool the people all the time" echoed Abraham Lincoln, This thought still holds good! The tension will burst the bubble sooner than later.


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