Government aims to curb fuel use amid rising global prices - President

Limiting fuel consumption is a primary government goal to control the outflow of foreign exchange as global fuel prices rise, Anura Kumara Dissanayake stated.

The President shared these views while attending the Nuwara Eliya District Special Coordinating Committee meeting. The cost of a litre of diesel surged to Rs. 720 due to global price hikes.

A target to reduce consumption exists because maintaining previous usage levels at higher prices would increase the outflow of dollars, the President explained.

The President further stated:

“Decisions were made based on the need to reduce consumption to a certain extent. While acknowledging that current fuel limitations hinder official duties, he assured that solutions would be provided soon.

In February, 98 million dollars were spent on oil imports, which rose to 216 million dollars in March and 368 million dollars in April. For May, the estimated cost is 522 million dollars. Compared to February, the cost of oil imports increased nearly sixfold, requiring the economy to be managed amidst such challenges.

According to the Petroleum Corporation, the price of a litre of diesel is approximately 720 rupees, yet it is provided at 392 rupees. The government bears a cost of 100 rupees for every litre of diesel, resulting in the Petroleum Corporation receiving 492 rupees. This leads to a significant loss that must be addressed. The Treasury took over a massive financial loss of approximately 84 billion rupees incurred by the Petroleum Corporation due to past mismanagement, and the Treasury now handles those debt payments. Inefficiency and further losses cannot be allowed to continue, as they become a burden on the Treasury.

The cost of electricity has also been impacted by rising oil production costs. The government attempted to provide relief; while electricity bills increased by 18%, this hike was implemented such that 95% of consumers are unaffected. Only 5% of the group is subject to the increase. The intention is to avoid placing a burden on ordinary citizens, but the Treasury cannot continually provide funds to the Petroleum Corporation and the Electricity Board. These institutions must be made efficient and managed to benefit the public.

Issues regarding small contracts and price fluctuations have emerged, and a solution will be provided by next Monday. A 20% allowance for price fluctuations was granted during the Covid-19 period. This will be reviewed to see if the same criteria apply today, and a price fluctuation allowance will be provided. Some who accepted contracts have avoided performing them due to these issues, while others are hesitant to submit bids; these problems will be resolved.

Regarding the fuel issue, adjustments are currently made based on March 31. This remains necessary because of the target to reduce fuel consumption to prevent an increased outflow of dollars. Efforts will be made to resolve the fuel supply issues that hinder the performance of duties”