Govt should lower fuel taxes to stabilize prices - Former CPC Chairman

The former Chairman of the Ceylon Petroleum Corporation (CPC), Mohamed Uvais, stated that the government should consider reducing taxes imposed on fuel in order to maintain price stability as much as possible.

Speaking at a press conference, Uvais noted that the Strait of Hormuz is currently experiencing disruptions. He warned that if Iran takes steps to close another strategic maritime route located between Yemen and the African continent, it could have a significant impact on many countries, including Sri Lanka.

The former Chairman further stated that such potential risks could be mitigated by maintaining effective communication with fuel suppliers and by managing fuel stocks and distribution systems with greater efficiency.

“Sri Lanka imports 100 percent of its petroleum requirements. Fuel prices have already been increased by Rs. 25 across all varieties. Given the current trajectory, global oil prices are expected to rise further. As a nation, we must take two critical steps: effectively manage our supply chains and maintain close coordination with our suppliers. At the same time, the resulting economic pressure is becoming increasingly difficult for both industrialists and consumers,” he said.

Uvais further emphasized that the present situation calls for government intervention through tax reductions. He noted that, rather than transferring the entire burden to the public, the government should provide relief by reducing taxes in order to prevent excessive fluctuations in fuel prices.

“We are aware that the Strait of Hormuz is currently restricted. In addition, there is another strategic route between Yemen and the African continent through which approximately 12 percent of global oil trade passes. If Iran or its allied armed groups obstruct that route as well, nearly 35 percent of global oil transportation could be disrupted. Such a development would place immense pressure on countries such as Sri Lanka. Therefore, it is essential that we adopt modern strategic measures at this time to ensure that our supply chain remains uninterrupted,” he added.