Energy sector experts and business chamber officials call upon the authorities to implement the fuel pricing formula to pass on the benefit of the sharp drop in global crude oil prices to consumers.
World oil prices suffered their biggest fall since 1991, last week to US$ 35 a barrel owing to the low demand following the spread of the coronavirus to over 100 countries. Brent crude futures, the global oil benchmark, was down by around 22 percent and US oil by 20 percent last week.
Resource Management Associates Managing Director and an international energy consultant Dr. Tilak Siyambalapitiya said a fuel pricing formula is essential since it is the only way to move away from the politically determined pricing of petrol, diesel, kerosene and fuel oil.
“Except for a narrow window between 2002-2004 subsequent governments since the 1950s have been poking their fingers into the petroleum industry to decide the prices,” he said, adding that the pricing formula should be a transparent mechanism.
He said a fuel pricing formula was first introduced in 2001 and it was operational from February 2002 to about January 2004. At its inception, the formula and the sources of data were published in the newspapers. Fuel prices were adjusted upwards or downwards by not more than Rs. 2 per litre, on the last Sunday of every month. If the calculated adjustment was more than Rs. 2 per litre, the remaining would be passed on to the next price adjustment.
Sri Lanka Chamber of Small Industry President Rohan de Silva said the small and medium sector entrepreneurs, the backbone of the economy contributing around 70 percent to the GDP, should be supported at this juncture when times are tough.
“The SME sector is often given step-motherly treatment. We call upon the Government to pass on the global oil price decline to the SMEs which are burdened by the rising cost of utilities,” de Silva said, urging the authorities to resume operation of the pricing formula.
The Opposition urged the government to revise fuel and gas prices in line with the global prices which are on a downward spiral. The current price of a litre of Octane 95 petrol is Rs. 162, super diesel Rs. 132, kerosene Rs. 70 and gas Rs. 1,483.