“Petroleum Stabilization Fund” to be set up | Daily News


 

No revision of fuel prices:

“Petroleum Stabilization Fund” to be set up

The Government has taken a policy decision not to revise the fuel prices for a year irrespective of the price fluctuations in the international market, Cabinet Spokesman and Information and Communication Technology Minister

Dr.Bandula Gunawardena said.Addressing the Cabinet press briefing at the Government Information Department yesterday, he said that a new “Petroleum Stabilization Fund” would be set up to absorb both profit and loss by maintaining fuel prices unchanged.

He added that a new import tax would be imposed on crude oil to make sure that the Indian Oil Company (IOC), the only private company operating fuel stations, does not make excessive profits from this move of the Government.

The Cabinet Paper stated that sustaining the current market fuel prices as they are also has the objectives of minimizing the traffic congestion and easing public and private transportation.

The minister said that the Government intends to collect about Rs.200 billion to the above Fund within six months from the savings from fuel price deduction in the international market.

“From this saving, we will gradually settle the Ceylon Petroleum Corporation’s (CPC) debt to the Ceylon Electricity Board (CEB). The CPC can also provide fuel to the CEB at a concessionary price, and thereafter the CEB can supply electricity at a concessionary rate. All this will help to reduce the country’s debt burden and the people will be the ultimate beneficiaries. The move to introduce a Petroleum Stabilization Fund is a novel approach which will deliver the fruits of ‘Saubagye Dekma’ policy of President Gotabaya Rajapaksa,” Dr.Gunawardena remarked.

The Cabinet paper stated that Rs 50 billion would be provided to the CEB from the aforementioned fund and the CPC would supply crude oil to the CEB for at a rate of Rs 70 per litre.

The minister observed that the CPC’s debt stood at Rs 600billion in 2019 and that it had recorded an operational loss of Rs 106 billion in 2018 and Rs.12 billion in 2019.

“Many countries tend to look for mid-term local solutions considering the risk prevailing in the economies due to the slowdown experienced in the global economy. Accordingly, the Government, taking the experts’ opinions into consideration, has paid attention to harvesting the benefits of current declining trend of crude oil prices in the global market,” the Cabinet paper said.

 


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