The increase of oil prices is inevitable in the current global context despite what the price formula is, Prime Minister Ranil Wickremesinghe told Parliament yesterday.The Prime Minister was responding to a question by JVP Leader and Chief Opposition Whip Anura Kumara Dissanayake who demanded to know the oil price formula.
The PM in response said that he does not have the price formula and that it must be requested from Finance and Mass Media Minister Mangala Samaraweera. “Whatever the methodology or the price formula is, the impact of the highly volatile global situation will be felt. If the US imposes economic sanctions on Iran in November the global crisis will deepen. World oil consumption usually increases from November to April because of the winter season. Some even predict that the price of a crude oil barrel which is at USD 80 could rise to even USD 90. The other issue is the strengthening of the US dollar. As a result, the currencies of many developing countries have depreciated. As a Government we are ready to deal with these twin crises while giving the necessary relief to the people,” the PM explained.
The Prime Minister also stressed that the oil price formula has received due Cabinet approval.“The new methodology received Cabinet approval on May 9 and it was introduced from May 11. The Cabinet appointed a committee of officials on July 10 to make necessary revisions to the oil prices as per the price formula,” he said.
“India revises the oil prices daily and some countries revise the oil prices weekly. We do not have the technical expertise to make daily adjustment to the oil prices. Hence, we do so every month. Until recently, the oil price revisions were administrative decisions of the Government, but in 2015 we proposed to go by the world market prices, and we gave that benefit to the people by reducing the prices. I can only explain the policy decisions.
“You have to sort out any technical matters with Minister Samaraweera,” the Prime Minister added.The Premier also said that the US-China trade war could also make a significant impact on Sri Lanka.“The world oil market prices are dependent on the demand for oil by these two countries,” he remarked.
The Prime Minister, responding to a question by MP Dissanayake on reducing import duty on oil, said it would not help ease the prevailing crisis.“All countries impose tax on oil imports and it is a vital source of income for the Government. Removing tax will not solve the problem we are facing,” he noted.
MP Dissanayake pointed out that Minister Samaraweera did not table the price formula in Parliament despite the repeated requests. He said the Finance and Mass Media Ministry has refused to give out the oil price formula even under the application he filed under the Right to Information Act.“You increase the oil prices on the 10th of each month citing a price formula which nobody is aware of. This is unfair by the consumers,” he complained.
Meanwhile the Prime Minister replying to UNP MP S M Marrikar said the measures taken by the Government to suspend the vehicle permit of state officials as a means of curtailing imports would have to be continued till the current pressures on the exchange rate eases. The MP requested to continue to offer the vehicle permit to the state officials who use it for the first time.