By Sandun A. Jayasekera
Fuel prices will be reduced shortly owing to a price drop of the same in the global market, Commuter Transport Management Minister Mahinda Amaraweera said yesterday.
The minister said he would discuss the possibility of a fuel price reduction with President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa this week and seek Cabinet approval next week.
“We observed a considerable drop in fuel prices in the global market consequent to the coronavirus outbreak. We will not hesitate to pass the benefit of this to the consumer. We expect a price reduction in transport, services and all consumer goods,” he said.
Commenting on the fuel price formula introduced by the Yahapalana Government, he said if the system remained to date, then the fuel price reduction would not have exceeded Rs.2 per liter, thereby hinting that the government expected a considerable fuel price revision before long.
“The problem with the fuel price formula was that if and when fuel prices soared in the international market, the prices in the local market rose disproportionately. When fuel prices dropped in the global market, the reduction in local fuel prices was negligently low. The government has decided to do away with this illogical system,” he said.
Meanwhile, Brent crude oil in the global market traded at USD 57.18 yesterday and in the US, the price of a barrel of crude oil remained at USD 52.15. In the OPEC Basket, the price of a barrel of crude oil stood at USD 55.66 yesterday. In comparison to fuel prices recorded in the global market a few months ago, analysts have observed a 25% price reduction.
The problem with the fuel price formula is that if and when fuel prices soar in the international market, the prices in the local market rise disproportionately