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