The Government will go ahead with a Fuel Price Stabilization Fund and though the benefits won’t be immediate. The fund shall decide fuel prices going forward and not government ministers, Energy Minister Udaya Gammanpila said.
“What such a fund does is keep fuel prices as stable as possible irrespective of global price fluctuations,” Gammanpila said.
“We decided to establish this fund after thoroughly studying similar funds elsewhere.
“Going forward, the fuel price shall be decided by the fuel price stabilization fund and not by ministers,” he said.
The Minister said the cabinet took over eight months to approve his proposal in March this year to set up the fund.
“On March 15 2021, my cabinet proposal to set up a fund was approved on November 23. It took over eight months, during which crude oil prices in the world market went up by 36 percent. So we are unable to provide instant benefits to the public the moment the fund is set up,” he said.
Speaking in parliament on Tuesday (23), Gammanpila called for a fuel pricing formula in the event a stabilization fund did not materialize. A few days prior, the Central Bank had also called for a formula.
The Government, while in opposition between 2015 and 2019 severely criticized a fuel pricing formula adopted by the then administration and promised to fix prices.
In June this year, Gammanpila said the stabilization fund, a key strategy of the current administration which rejected market pricing of fuel while in opposition, was “not there”.
The Finance Ministry reports showed that the fund was set up in 2020 but contributions stopped as prices started to pick up and a tax surcharge on fuel was removed. Sri Lanka fuel price stabilization account was Rs. 26 billion in the red Official data also showed that the underlying account of the fund was in fact Rs. 26 billion rupees negative by end 2020.
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CEB: ‘highest scorer’ in CPC debt - Gammanpila
Ravi Ladduwahetty
The Ceylon Electricity Board (CEB) is the highest creditor of the Ceylon Petroleum Corporation ( CPC) and they owe the CPC, an astronomical Rs. 98 Billion, Energy Minister Udaya Gammanpila told the Daily News yesterday.
He also said that in the line of credit, the National Carrier- SriLankan Airlines owes the CPC the second highest debt of Rs. 58 Billion.
It is not surprising that the CPC in such a bad position due to it subsidizing these institutions where we sell kerosene at Rs. 77 per litre when the production cost is Rs. 110 per litre; Furnace Oil is also sold at Rs. 40 per litre while the cost is Rs. 70 per litre. It is also similar for the sale of aviation fuel for the National Carrier as well, he said.
“It is high time that that the Treasury provides us with a subsidy which could provide an improvement to the CPC cash flows”, the Minister remarked.
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