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No fuel price reduction despite Basil

09 Jul 2021

  • Gammanpila points at increasing global oil prices

By Madhusha Thavapalakumar Regardless of rumours that local fuel prices will be reduced following the recent appointment of the new Minister of Finance, subject Minister Udaya Gammanpila told The Morning Business that the local fuel prices will not be subjected to any revisions, according to his knowledge. Gammanpila stated that even though the Government would prefer to go for a price reduction, increasing global oil prices will prevent the Government from doing so.  “The Government has not yet decided to reduce the fuel prices as far as I know. It is highly unlikely to reduce the local prices because of the sharp fuel price increase in the global market. For instance, the price of a petrol barrel, which was above $ 70 when we increased the prices, is now around $ 83, and OPEC has forecasted that the prices will increase in the near future,” he added. Following the increase in local oil prices after almost two years, during which period the newly-appointed Minister of Finance Basil Rajapaksa was in the US, the public and several politicians claimed that such a revision at a time of misery would not have been allowed to happen if Rajapaksa was in the country. Some of them even claimed that once he returns to the country/takes oath as a Member of Parliament, fuel prices would be reduced.  Rajapaksa took oath as MP at the Parliament before speaker Mahinda Yapa Abeywardena yesterday (8) and was subsequently appointed as the Minister of Finance. Rajapaksa was elected to Parliament from the National list of the United People’s Freedom Alliance in 2007. In the 2010 parliamentary election he was elected from Gampaha district by obtaining the highest number of preferential votes in Sri Lanka. He gained a record 425,861 preferential votes. He was the Cabinet Minister for Economic Development from 2007 to 2010 in the sixth Parliament and 2010 to 2015 in the seventh Parliament. He has held a number of positions as Senior Advisor to the President and head of Presidential Task Forces. As the global oil prices began recovering and hitting two year highs in the recent weeks, when we contacted Gammanpila last month, he said that the Government is trying and will try as much as they can to maintain fuel prices without burdening the consumers further. Even a week prior to the revision, Gammanpila told us that his Ministry is planning a new refinery and this would offset the financial impact caused from the maintenance of local fuel prices.  However, a week later, local fuel prices increased. The Government increased the price of a litre of Octane 92 petrol by Rs. 20 to Rs. 157, 95 Octane Euro by Rs. 23 to Rs. 184, Diesel by Rs. 12 to Rs. 111, Super Diesel by Rs. 12 to Rs. 144, and Kerosene by Rs. 7 to Rs. 77. The reason for the revision was cited as colossal sums of losses CPC made for some years now.  According to opinions expressed publicly by local economists, while the recent price revision has added fuel to the fire, the impact of not increasing the prices would have indirectly burdened the general public either through new tax policies, underperforming economy, or even increased electricity prices (if Ceylon Electricity Board is to settle CPC’s bills) nonetheless. 


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