Petrol Can be sold for Rs 90

Monday, 14 May 2018

Government parliamentarians repeatedly say that although fuel prices were increased, those are still lower than the prices of Rajapaksa era.  This is an illogical and irrational statement. The government increased the price of 1 liter of Petrol to Rs 137 on 10th May.  Average price of crude oil in the previous month was $67 per barrel. Rajapaksa Government increased the price to Rs 137 on 30 September 2011 when a barrel of crude oil was $100.  We sold a petrol liter for Rs 137 when the barrel of crude oil was $100.  This government does the same when the barrel of crude oil was just $67.

thumbnailIt is true that our Government sold petrol even at Rs 150.  However, it was when the barrel of crude oil was between $100 – $110.  If the world fuel prices are increased to those levels, this government will definitely increase the price of petrol to Rs 200.

When the price of petrol was decreased to Rs 117 in January 2015, the average price of crude oil in the previous month was $61.  The government economic pundits should explain why they cannot sell petrol at Rs 117 when a barrel of crude oil is $67, if they can do the same when it was $61.  It is noteworthy that when the price of a barrel of crude oil was dropped to $29 in January 2016, the government did not pass the benefit to consumers.

As MP Ravi Karunanayake correctly pointed out, the government had to increase the prices because of heavy taxes imposed on fuel. President Sirisena promised to remove all taxes on fuel in Page 28 of his election manifesto?  Not only he conveniently ignored it but also collected around Rs 80 billion as fuel taxes in the previous year.  If there are no taxes on fuel, a petrol liter can be sold for Rs 90.