An ingenious solution | Sunday Observer

An ingenious solution

3 September, 2023

The QR Code system for fuel was terminated from Friday, possibly marking the end of a tumultuous era for the economy that began early last year. This period was marked by shortages of fuel, LP Gas and even essential foods caused by an acute lack of foreign exchange for imports.

In fact, several people died in fuel queues that lasted for days on end as fuel supplies virtually ran out. Some profiteers made use of this opportunity to sell fuel in the black market for Rs.1,500 a litre to desperate motorists.

A solution was urgently needed to ration the limited fuel stocks available so that everyone would get a fair quota. This would also eliminate the black market. On an initiative of Power and Energy Minister Kanchana Wijesekara, the Ministry along with several leading private sector IT companies developed an ideal solution based on the proven QR code platform.

This system, coupled with somewhat high pump prices, almost instantly eliminated the queues and also the excess consumption of fossil fuel. Private motorists used their cars only for essential journeys as only 20 litres of fuel were offered initially per week. This was gradually increased to 40 litres a week as the economy and the foreign exchange reserves improved.

Now that economic stability has returned and foreign reserves have climbed to a manageable level, the authorities have decided to do away with the QR Code system. This is as it should be in a democracy and an open economy, which are basically incompatible with the concept of restrictions and rationing. Now any one can drive into a filling station and get a “full tank” without having to produce a QR code.

Nevertheless, there are many lessons to be learnt from the whole QR code episode. One is that no matter how dire a given situation is, a solution is always available with today’s IT technology. Another pertinent point is that any such solution can be developed locally, without having to consult foreign experts or companies, as often done here. By developing the QR code system locally, the Ministry saved millions of dollars that could otherwise have gone to a foreign company. This system also proved that Sri Lankans can quickly adapt themselves to new technologies without necessarily having to experience a steep learning curve. It also showed that corruption can be reduced to a great extent, if not eliminated, by using new technology.

The QR system also had another built-in advantage – the authorities had a real-time picture of fuel consumption patterns 24/7. This enabled the Ceylon Petroleum Corporation (CPC) to analyse the usage trends and order only the anticipated amounts of fuel. In the absence of this mechanism, the CPC (and the other players in the market) should develop applications that can track sales so that adequate stock levels can be maintained.

The liberalisation of the retail fuel market is also another important step that will ultimately benefit the consumer. Sinopec of China, the third player to enter the market after the CPC and LIOC, already offers a Rs.3 discount per litre even after Sunday’s price hike of all fuel varieties. It will also ease the burden on the Exchequer, as the new players (United Petroleum of Australia and RM Parks of USA are the other two) will have to import fuel using their own funds without dipping into our foreign reserves. With the coming electric revolution, these new filling stations should also be required to have at least two DC superchargers for electric vehicles.

Actually, foreign oil giants such as Shell and Caltex were very much active in Sri Lanka before they became a casualty of the wave of nationalism and nationalisation in Sri Lanka in the 1960s. Shell even wanted to build Asia’s biggest refinery in Sri Lanka before it was unceremoniously kicked out. It later established that facility in Singapore, which is now one of the world’s biggest finished petroleum product exporters with an annual turnover of nearly US$ 40 billion. Just imagine what Sri Lanka could have been with that kind of project – the country could have paid off its entire foreign debt twice over within just two years.

In hindsight, expelling the foreign oil giants was perhaps the biggest blunder committed by a Sri Lankan Government in living memory. If they were around last year, at least the fuel crisis would not have happened as they would have spent their own resources to import fuel.

There are two other factors to consider – the Government must stress the importance of saving fuel from an environmental and financial perspective and also encourage private motorists to switch over to public transport by building a clean, efficient, punctual, comfortable and possibly electric public transport network (buses and trains). The six-line Light Rail Transit (LRT) project should be revived as soon as possible as part of this plan. A good public transport system is the only answer to traffic congestion and excess fossil fuel use.


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