With the incessantly increasing world fuel prices and the existing rupee deflation, the local prices of petrol and diesel are likely to rise further in the coming months. As per experts, in addition to the issues arising from adverse global conditions, the prevailing severe shortage of foreign exchange in the country will hamper the continuous supply of diesel and petrol for an indefinite period. The forecast is that fuel shortages will occur at frequent intervals until the country’s economy completely stabilises.
Transportation is a critical component of a country’s social and economic development. Because of the human productivity provided by passenger transportation, this factor has a major impact on economic development. In general, Sri Lanka’s bus transit is the primary means of transportation, accounting for around 80 percent of commuter kilometres, while rail travel also plays a substantially significant role.
The existing availability of 5, 300 State-owned Sri Lanka Transport Board buses and around 20,000 privately operated buses in Sri Lanka does not appear to be sufficient to offer good public transportation. Hence, specific attention must be paid by the authorities immediately on the subject due to the anticipated fuel supply shortage.
Economic crunch
The country is now in an unusually perilous situation with the ongoing economic crunch. Hence, it is enormously important that overall fuel consumption be regulated to the maximum possible level. According to available data, Sri Lanka currently imports approximately six billion US dollars’ worth of petroleum products such as crude oil, refined petroleum products, and other petroleum-based products annually, out of the total import figure of 21 billion. With new foreign currency rate escalations, experts say that the figure is expected to reach inaccessible heights in the near future.
The current world oil prices are at around US$ 115/120 per barrel, which is the highest since 2008, according to statistics.
OPEC announced recently that world demand would rise by 3.36 million barrels per day in 2022, mainly due to the ongoing Russian- Ukrainian war and that the ongoing geopolitical developments would impact oil prices further. For various reasons, the entire world is facing a severe energy crisis. All these world conditions are likely to send Sri Lanka into further turmoil as well.
Therefore, finding a way to drastically decrease fuel consumption is an extremely dire necessity at this moment. In Sri Lanka, petroleum-based products are used for power generation, manufacturing, road and rail transportation, and many other functions. The current total annual consumption of petrol and diesel in motor vehicles in Sri Lanka is unbearably high. This is something that can be controlled by improving public transport, as is currently done in many developing countries.
Sri Lanka’s motor vehicle population is astonishingly high, with over eight million, compared to the country’s economic standing. This is an intolerable number for the existing road network. In Sri Lanka, there are 1.1 million three-wheelers and 4.6 million motorbikes on the roads. Also, there are 28,000 buses used for public transportation by both private and state-owned operators. Similarly, in the railway sector, there are approximately 25,000 seats available to serve a passenger base of 147,000. As previously stated, this demand-supply imbalance creates havoc on public transportation.
Despite a number of proposals by subject specialists, successive Governments ignored the importance of improving public transport to an acceptable level. If not for such ignorance, the enormous outflow of foreign exchange could have been averted and large amounts of foreign currency would have been saved.
Public opinion is that constant political interference, corruption, malpractices, and bureaucracy created the present pitiful situation with regard to public transport. Prolonged inaction by authorities has created intolerable issues in transport.
Professionals in the subject of public transport reveal that a number of projects proposed by them were either completely ignored or abandoned after starting, mainly because of political whims and fancies. The proposals they have presented after years of research have never been put into action. They are of the view that 80 percent of the population use public transport, and thus solving public transport issues must be a top priority.
Every time an election is called or a new government comes into power, most often, new pledges are presented to the people for the improvement of public transport. However, usually, the previous proposals are discarded.
The priority of the authorities must be to ease commuter congestion and minimise the number of vehicles on the roads to save fuel. None of these projects sees the end because the Governments keep changing. The reason for this mess is that no Government has so far managed to introduce a national policy on this extremely important public need.
The economic impact of consuming fuel due to traffic congestion in main cities is enormous, and it unnecessarily burns millions of rupees every single day. For example, an estimated 1.1 million people enter Colombo city every day using public transport, while approximately 500,000 people arrive using private vehicles. This huge number of public and private vehicles not only causes severe inconvenience but also has a negative economic impact due to the waste of fuel caused by traffic congestion.
Consecutive Governments
According to international data on fuel prices, Sri Lanka falls into the category of countries with the lowest prices (51st in the list of countries on petrol prices as per Statistics Times). The vast majority of the countries listed below (1 to 50) are fuel producing countries. The low price given by the Sri Lankan Government up to last week was a colossal loss to the State coffers. Consecutive Governments adhered to the same formula for a considerably long time due to public pressure. However, with the current crisis, the Government was forced to increase prices even when it was not a popular move.
Hence, if the number of people entering cities in their private vehicles can be reduced, this colossal waste can be minimised. The pilot project “Park and Ride” city bus service that was introduced in 2021 for commuters to park vehicles at Makumbura Multimodal Transport Centre and use buses to the city to minimise the number of automobiles to and from Colombo was a success initially but was abandoned later for unknown reasons.
However, at this crucial point, the country needs more viable projects, perhaps improved versions. There are plenty of professionals and experts available in the country to spearhead these types of useful projects.
Even if the Petroleum Corporation is not making a loss with the increased prices, limiting fuel imports is a critically important move at this point in time when the country is suffering the most serious forex shortage.
A substantial portion of the massive amount of foreign exchange (the total of almost 25 percent of the total imports) can be saved if the fuel consumption of privately owned vehicles can be reduced by introducing convenient public transport.
Therefore, the best possible method to control fuel consumption is to improve the public transport sector. It is high time for the Government to seek realistic and pragmatic professional advice.
Consult scholars
In this writer’s opinion, the authorities must consciously consult scholars from the Department of Transport and Logistics at the University of Moratuwa who have done several types of research on public transport and other related areas.
It is clear that every rupee spent on the improvement of public transport can yield huge economic gains. In particular, in the ongoing crisis, foreign exchange saved by reducing fuel consumption can be crucially important to the economy of the country.
Hence, the Government must immediately roll into action and improve the public transport sector as a top priority.
The Government seems to focus heavily on ways and means of countering the oncoming food crisis. However, reducing fuel imports is also as important as confronting the food crisis, as the foreign currency savings from fuel consumption reduction can be invested back in essential imports.