Govt. should use funds in treasury to provide concessions instead of increasing fuel prices – Harsha

The government should utilize the funds in the treasury to provide concessions to the general public instead of increasing fuel prices in line with global developments, the Chairman of the Committee on Public Finance (CoPF), Member of Parliament Harsha de Silva stated.

MP de Silva is of the view that the government has adequate buffer stocks in the treasury to absorb the temporary shocks due to the ongoing conflict in the Middle East.

Speaking on the Derana ‘360°’ programme, Parliamentarian Harsha de Silva noted that there are several tools that can be used to prevent an increase in fuel prices.

He stated approximately Rs. 118 is charged in taxes for a litre of fuel while after the addition of logistical and other charges, the Value Added Tax (VAT) is also imposed on fuel.

Since it is a temporary development and the increase in fuel prices will impact other sectors, the Parliamentarian noted the importance of using the buffer amounting to around Rs. 750 billion in the treasury systematically and preventing further increase in goods and services.

He added a request has also been made to increase electricity tariffs which will add to the difficulties faced by industries and the public since the COVID-19 pandemic.

The Parliamentarian noted due to the increase in crude oil prices in the world market, the importation of substandard coal and the lack of rain in the coming months, the electricity tariffs will increase.

Parliamentarian Harsha de Silva stressed that the government cannot absolve itself by merely allowing prices to increase which will be a severe burden on industries and the public and therefore urged the government to take remedial measures promptly.

On a separate note, the Managing Director of the Ceylon Petroleum Storage Terminals Limited (CPSTL), Mayura Neththikumarage has explained today (10) the reasons for yesterday’s increase in fuel prices in the country.

He stated that the decision was taken as a precautionary measure to prevent a sudden surge in fuel prices in the future.

Speaking further, the Managing Director of the CPSTL, Neththikumarage, noted that the revision in fuel prices is usually done based on the price of fuel in the previous month. However, although the country maintains a fuel stock sufficient for about 30 days, the price of fuel expected to arrive on ships for the following month has been rising significantly.

He added that authorities aim to manage the existing fuel stocks carefully in order to normalize prices.

“Accordingly, in order to prevent a sudden surge in fuel prices and to carefully divide the available stocks between months, we normalized the price,” the Managing Director of the CPSTL said.

Neththikumarage also stated that the authority is expected to help control fuel hoarding and create the background necessary for the public to obtain fuel at a stable price without the emergence of queues.

He further noted that if prices in the global market decline, fuel prices in Sri Lanka could also be reduced within the next few days.

According to the fuel pricing formula, the Ceylon Petroleum Corporation (Ceypetco) revised fuel prices on March 1, however nine days later, prices of all fuel variants were increased again last night (09).

Accordingly, the price of a litre of Petrol 92 Octane has been increased by Rs. 24, bringing the new price to Rs. 317.

The price of Petrol 95 Octane has been increased by Rs. 25, with the new price set at Rs. 365 per litre.

The price of Auto Diesel has been increased by Rs. 22 to Rs. 303 per litre, while Super Diesel has been hiked by Rs. 24 to Rs. 353 per litre.

The price of a litre of Kerosene has also been hiked by Rs. 13, bringing the new price to Rs. 195.

Other fuel companies have also revised their fuel prices accordingly.