As soon as fuel prices increase, the prices of other commodities and services continue to grow at an enviable level. But when the price of fuel is reduced, no relief will be given to ordinary people.
In the absence of a price hike, prices of consumer goods did not go down. Reducing fuel prices will only benefit those who have vehicles. Vehicle owners are familiar with the current fuel prices. Therefore, the government must reduce the VAT rate or reduce the prices of consumer goods directly affecting the public.
If the government incurred a huge loss through increasing fuel prices, the government is responsible for it and not the public. It is impossible for the government to know that such a loss will occur in the long term.
Government policies have to be prepared not to provide temporary satisfaction but to consider the long-term consequences for the public. The government is responsible for this. The government is not aware of this and the people have been greatly inconvenienced.
In the event that local fuel prices are reduced as and when there is a drop in the world crude oil prices, this will be the ideal scenario. However, the question is: did the Government of Sri Lanka reduce fuel prices when the world oil prices dropped? The answer is an emphatic ‘no.’
In light of the above, the decision taken by the Government of Sri Lanka to review fuel prices is met with a negative response. It is rather unlikely that the benefit of any change in fuel prices will be passed down to the public at large. The benefits will be reaped by the government and not even by the Ceylon Petroleum Corporation (CPC). This will definitely be a one-sided affair.
History shows us that when a fuel price hike takes effect, it has a chain reaction resulting in transportation, food, and other products and services costs being increased by the respective service providers. But in the event of a reduction in fuel prices, there is no proportionate reduction in the costs of these products and services.
With the corrupt dealings continuing in the petroleum industry, the people of Sri Lanka will only have to face a heavy blow and tighten our belts to the maximum whilst ‘the powers that be’ continue to enjoy all the comforts at our expense.
The revision of fuel prices is quite connected to the ‘if’ factor. So if it is in the best interests of the many only then can the idea can see the green light.
Remember, the government did not pass the benefit to the public when prices in the world oil markets were low. It seems contradictory. As such, this idea of the revision of prices arouses suspicion. The public is caught in a conundrum as to the logic or rationale behind this plan.
At the end of the day, whatever is said and done, the public is to bear the loss. That is how the formula works ultimately whether the government or people like it or not.
Either way, it will be a temporary patch that accumulates inflationary pressures. Be it for the purposes of taxing or a quick fix for staggering financial performance of the state petroleum corporation, the outcome seems to not serve the purpose.
On the other hand, with fuel price revisions, many sectors request subsidies from the government. So it will be a poor balance in one aspect and not in its entirety. For this, there need to be controls implemented and monitoring, and watch guards who are productive, which are more unlikely in the Sri Lankan context.
The increase in oil prices is largely due to tax increases. The income derived from tax increases goes to the government and the Ceylon Petroleum Corporation (CPC) does not get the profit, although the CPC will be used to rebuild the loss-making corporation. As a result of the increase in that price, only the government directly earns profits.
The main incurrence of fuel prices is the necessity to increase bus fares. If fuel prices increase, there will be more of an impact on the stomachs of people. The prices of all commodities will be increased as soon as fuel prices go up. Those prices go up only at the expense of the price of fuel. The Consumer Affairs Authority does not seem to protect customers.
It’s not a favourable plan unless there is a sudden change in the oil markets with an upward trend in world oil prices that sounds some reasonableness.
Apart from the revision of prices, there are areas that need significant attention. This includes the hedging deals that created havoc and massive losses, Ceylon Petroleum Corporation (CEYPETCO) incurring bad debts by long outstanding payments from government organisations such as Sri Lanka Railways (SLR), Sri Lanka Transport Board (SLTB) etc.
On top of the quantitative factors, the dwindling procurement practices saw the importation of unsuitable petroleum some years back. Also, the ill practices of mixing water with petrol and kerosene.
When there are pressing issues that need priority, where does the price revision stand?
After all, it is not the loss making Ceylon Petroleum Corporation (CEYPETCO) that makes the gain. It is the trade and commercial sector that seizes the opportunity.
These traders and businesses add at least a fourfold markup with the revision of fuel prices. Each time, it is the trend.
When price of petrol or kerosene increased by Rs. 20, the traders somehow grabbed the chance to increase the price of their products by at least 5 rupees per item. So four of five loaves of bread or lunch packets can do the trick.
Remember, those traders in essential retail sectors such as the food and beverage sector who are bakers, and eateries that cater to the average middlemen are those who get the real benefit out of price revisions. Not the public anymore. Sounds like an unwise move.
A periodical reviews is acceptable provided that it does not give way for an upward hike in prices.
On the other hand, how about reviewing prices against operational costs? That seems like a good idea so that the cutoff point or a threshold can be set in terms of the cost factor.
This helps by being an eye opener so that costs can be managed efficiently. Unnecessary costs can be eliminated. Administrative authorities can transform these loss making state owned enterprises into profit making enterprises by controlling inefficiencies and waste at the right points. This will reduce the burden on both public and state coffers.
This is a rip off! Because we know that when the oil prices come down, nothing will happen!
I really think that the government has to consider the plight of the poor and I say this because oil prices affect everyone through the higher cost of transport (of people and essential goods). There must be a better and more equitable way to cushion ourselves against fluctuations in the oil market.
As soon as fuel prices increase, the prices of other commodities and services continue to grow at an enviable level. But when the price of fuel is reduced, no relief will be given to ordinary people.
In the absence of a price hike, prices of consumer goods did not go down. Reducing fuel prices will only benefit those who have vehicles. Vehicle owners are familiar with the current fuel prices. Therefore, the government must reduce the VAT rate or reduce the prices of consumer goods directly affecting the public.
If the government incurred a huge loss through increasing fuel prices, the government is responsible for it and not the public. It is impossible for the government to know that such a loss will occur in the long term.
Government policies have to be prepared not to provide temporary satisfaction but to consider the long-term consequences for the public. The government is responsible for this. The government is not aware of this and the people have been greatly inconvenienced.
In the event that local fuel prices are reduced as and when there is a drop in the world crude oil prices, this will be the ideal scenario. However, the question is: did the Government of Sri Lanka reduce fuel prices when the world oil prices dropped? The answer is an emphatic ‘no.’
In light of the above, the decision taken by the Government of Sri Lanka to review fuel prices is met with a negative response. It is rather unlikely that the benefit of any change in fuel prices will be passed down to the public at large. The benefits will be reaped by the government and not even by the Ceylon Petroleum Corporation (CPC). This will definitely be a one-sided affair.
History shows us that when a fuel price hike takes effect, it has a chain reaction resulting in transportation, food, and other products and services costs being increased by the respective service providers. But in the event of a reduction in fuel prices, there is no proportionate reduction in the costs of these products and services.
With the corrupt dealings continuing in the petroleum industry, the people of Sri Lanka will only have to face a heavy blow and tighten our belts to the maximum whilst ‘the powers that be’ continue to enjoy all the comforts at our expense.
The revision of fuel prices is quite connected to the ‘if’ factor. So if it is in the best interests of the many only then can the idea can see the green light.
Remember, the government did not pass the benefit to the public when prices in the world oil markets were low. It seems contradictory. As such, this idea of the revision of prices arouses suspicion. The public is caught in a conundrum as to the logic or rationale behind this plan.
At the end of the day, whatever is said and done, the public is to bear the loss. That is how the formula works ultimately whether the government or people like it or not.
Either way, it will be a temporary patch that accumulates inflationary pressures. Be it for the purposes of taxing or a quick fix for staggering financial performance of the state petroleum corporation, the outcome seems to not serve the purpose.
On the other hand, with fuel price revisions, many sectors request subsidies from the government. So it will be a poor balance in one aspect and not in its entirety. For this, there need to be controls implemented and monitoring, and watch guards who are productive, which are more unlikely in the Sri Lankan context.
The increase in oil prices is largely due to tax increases. The income derived from tax increases goes to the government and the Ceylon Petroleum Corporation (CPC) does not get the profit, although the CPC will be used to rebuild the loss-making corporation. As a result of the increase in that price, only the government directly earns profits.
The main incurrence of fuel prices is the necessity to increase bus fares. If fuel prices increase, there will be more of an impact on the stomachs of people. The prices of all commodities will be increased as soon as fuel prices go up. Those prices go up only at the expense of the price of fuel. The Consumer Affairs Authority does not seem to protect customers.
It’s not a favourable plan unless there is a sudden change in the oil markets with an upward trend in world oil prices that sounds some reasonableness.
Apart from the revision of prices, there are areas that need significant attention. This includes the hedging deals that created havoc and massive losses, Ceylon Petroleum Corporation (CEYPETCO) incurring bad debts by long outstanding payments from government organisations such as Sri Lanka Railways (SLR), Sri Lanka Transport Board (SLTB) etc.
On top of the quantitative factors, the dwindling procurement practices saw the importation of unsuitable petroleum some years back. Also, the ill practices of mixing water with petrol and kerosene.
When there are pressing issues that need priority, where does the price revision stand?
After all, it is not the loss making Ceylon Petroleum Corporation (CEYPETCO) that makes the gain. It is the trade and commercial sector that seizes the opportunity.
These traders and businesses add at least a fourfold markup with the revision of fuel prices. Each time, it is the trend.
When price of petrol or kerosene increased by Rs. 20, the traders somehow grabbed the chance to increase the price of their products by at least 5 rupees per item. So four of five loaves of bread or lunch packets can do the trick.
Remember, those traders in essential retail sectors such as the food and beverage sector who are bakers, and eateries that cater to the average middlemen are those who get the real benefit out of price revisions. Not the public anymore. Sounds like an unwise move.
A periodical reviews is acceptable provided that it does not give way for an upward hike in prices.
On the other hand, how about reviewing prices against operational costs? That seems like a good idea so that the cutoff point or a threshold can be set in terms of the cost factor.
This helps by being an eye opener so that costs can be managed efficiently. Unnecessary costs can be eliminated. Administrative authorities can transform these loss making state owned enterprises into profit making enterprises by controlling inefficiencies and waste at the right points. This will reduce the burden on both public and state coffers.
This is a bad move. It will cause suffering to the people.
This is a rip off! Because we know that when the oil prices come down, nothing will happen!
I really think that the government has to consider the plight of the poor and I say this because oil prices affect everyone through the higher cost of transport (of people and essential goods). There must be a better and more equitable way to cushion ourselves against fluctuations in the oil market.