Dare to be different

Ajith P. Perera, Chief Organiser, Bandaragama, UNP – අධිනීතිඥ අජිත් පී. පෙරේරා, ප්‍රධාන සංවිධායක, බණ්ඩාරගම, එක්සත් ජාතික පක්ෂය

Thoughts on fuel prices, three wheelers and Mahinda Chinthana

Posted by Ajith on January 15, 2008

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According to Lanka Business Online (LBO), government has raised fuel prices from midnight Sunday with petrol going up by 10 rupees, diesel 5 rupees and kerosene 2 rupees. This makes the price of 90-octane petrol Rs. 127; auto diesel Rs. 80.00, super diesel Rs. 85.30 and kerosene Rs. 70.

This is not the first time in the near past the fuel prices took a swift elevation. Now it is almost a bi-monthly event. As usual, the classic reason given is the change in the crude oil prices in the world market.

Interestingly, this price hike comes at a time the worldwide crude oil prices were actually plummeting. Price of a barrel rose to US$ 100 at the beginning of year momentarily, but since then it was falling. An AP report says now the oil prices are steady around US$ 92 a barrel –lower than Nov 2008 values. So crude oil prices can no more be an excuse – at least for the recent price hike. One might also question what component of the petrol/diesel prices actually depends upon the crude oil prices and what constitute the different tax components, which have nothing to do with crude oil.

Budget speech 2008, itself referred to the high fuel prices and the hardships public may undergo by the same. This was what President Rajapakse, as the Minister of Finance said:

Honourable Speaker, the price of crude oil has now exceeded US$ 95 per barrel. As such, the need to adjust fuel prices has surfaced again. However, since any revision of diesel and kerosene price would cause hardship to the public, I am considering to refrain from revising such prices at least as a temporary measure…If international price of crude oil remains continuously high, we have no choice but to face the hard reality. However, the price of kerosene will be maintained at the current level and provision has already been made to extend a Rs. 100/- kerosene subsidy per month to Samurdhi and other low income households who do not have electricity. It is proposed to give limited quantity of petrol at a discounted price to three wheelers with meters and also to introduce a loan scheme to enable the purchase of such meters. (Budget speech, 2008)

Did the international price of crude oil remained high? No it is US$ 92 now, lower than what it was when the budget speech was written. So why a hike? Shouldn’t we see a drop?

Then how can one forget what Mahinda Chinthana said about controlling the fuel prices and there by relieving the burden of the people?

Political and other interferences have created immense problems in our energy sector. I aim at relieving our poor and the country’s economy of the impact of increasing energy prices in the world market, and at improving the energy supply to match the demand within the country. (Mahinda Chinthana, English Version, page 60)

So one would really wonder what relief a price hike of petrol, diesel and kerosene would bring to poor people, without providing any cushions they were promised in the pre-election period.

LBO also notes that the type of price increase would have more impact on the poor than rich. This is because of the subsidy provided for diesel consumers overpricing the petrol. Nothing can be far from the truth than assuming it is the rich who consumes petrol, while poor consumes diesel. For example what type of fuel the three-wheelerers use? Does anyone think the three wheelerers too a group of rich businessmen who should pay more so that the ‘poor’ company chairmen who uses diesel cars should not be affected by high prices of diesel?

Again this is what Mahinda Chinthana promised to three wheelerers:

I will prepare a plan, with stake-holder consensus, to provide fuel at concessionary rates to public transport services such as trains, buses and three-wheelers. The services rendered by the three-wheelers in the national transport system will be appraised, and an action plan will be developed to alleviate the problems faced by them. (Mahinda Chinthana, English Version, pages 63-64)

The million rupee question is how long the poor three wheelerers have to wait till the promises given to them materialize. Will that ever happen in near future? Or will they too be conveniently forgotten like most of the typical election promises of our times?

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4 Responses to “Thoughts on fuel prices, three wheelers and Mahinda Chinthana”

  1. ddm said

    The previous price adjustment in SL took place in the end of the July ’07 (I think) at which point the price of petrol increased to the current Rs. 117 per litre. In July ’07 global oil prices were around US$77. Today as you rightly point out, global prices are hovering around $92. (I suspect this will increase if the US interest rates are slashed).

    So we were due an adjustment since global prices have risen significantly since the last adjustment in SL. Keeping prices artificially low only means an implicit petrol subsidy by the govt. which is anyway paid by taxes (ideally) or by inflationary central bank credit to the government – which imo is far more damaging than relatively predictable and transparent price increases in oil products.

  2. Ranjith Gunawardena said

    Nikita Khrushchev once said all politicians are same; they will promise to build a bridge even there is no river. His remarks were aimed at Americans, but valid more for our people of today.

    Only a complete idiot or a child will believe something like ‘Mahinda Chinthana’ – which is not worth even the paper it is written on. Mahinda maama is a typical South Asian politician who would not hesitate to promise rice from moon, if that helps him to win.

    Whatever Mahinda maama does we have to continue with our daily realities. I do not think complaining per se will help.

  3. Sean said

    A UNP politicians’ grave concerns’ about the ‘poor masses’…!
    Very funny!
    Having sold anything and everything valuable that belonged to country for a pittance to the private sector, party cronies or multinational crooks during their time in power, now they are asking ‘what’s going to happen to the people?’
    Chandrika & Co, MR & Co learnt well from the UNP of the past… Now the whole nation’s paying for it… Stop shedding crocodile tears Mr. Politician, you are all the same… Stink to the core…! At least spare us from your false concern…! We don’t need that…!

  4. Swim Fan said

    Dear Friends!

    Petrol in Pakistan Rs17/00 per litr
    Malaysia Rs 18/00 per litr
    In India it’s Rs 48/00 per litr
    In Sri Lanka it is Rs. 127/00 per litre

    Why this difference in Asia itself?
    World Market CRUDE Oil is not the reason for this.
    It’s all Gain for private owners?

    As we are the general public, or Common Man as R.K.Laxman would have said, we have to raise our voice,
    let’s raise it through E-mails.

    Forward this to all Indians (and Sri Lankans???) who cares.

    IT HAS BEEN CALCULATED THAT IF EVERYONE DID NOT PURCHASE A DROP OF PETROL FOR ONE DAY AND ALL AT THE SAME TIME, THE OIL COMPANIES WOULD CHOKE ON THEIR STOCKPILES.

    AT THE SAME TIME IT WOULD HIT THE ENTIRE INDUSTRY WITH A NET LOSS OVER 4.6 BILLION DOLLARS WHICH AFFECTS THE BOTTOM LINES OF THE OIL COMPANIES.

    THEREFORE, ‘TUESDAY JAN 22nd’ HAS BEEN DECLARED ‘STICK IT UP THEIR BEHIND’ DAY AND THE PEOPLE OF THIS NATION SHOULD NOT BUY A SINGLE DROP OF PETROL OR OIL ON THAT DAY.

    The only way this can be done is if you forward this e-mail to as many people as you can and as quickly as you can to get the word out.

    Waiting on the Government to step in and control the prices is not going to happen.

    What happened to the Reduction
    AND
    Control in prices that the Arab nations promised two weeks ago?

    Remember one thing, not only is the price of petrol going up but at the same time Airlines are forced to raise their prices, Trucking companies are forced to raise their prices which affects prices on everything that is shipped. Things like FOOD, CLOTHING, BUILDING SUPPLIES MEDICAL SUPPLIES ETC.

    Who pays in the End?

    WE DO!

    We can MAKE A DIFFERENCE.

    If they don’t get the message after one day, we will do it again and again.

    So, do your part and spread the word.

    Mark your Calendars and Make JAN.22nd a day that the Citizens say ‘ENOUGH IS ENOUGH’

    REMEMBER : JAN 22nd 2008.

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