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Last Updated : 2024-04-23 16:21:00
21 September 2022 02:48 am - 14 - {{hitsCtrl.values.hits}}
- Sri Lanka has raised fuel price at the pump to at least thrice the level it was a few months ago
- Prof. Kumarage urges authorities to get transport sector pricing right to eliminate subsidies and economic imbalances
- Says subsidised fuel prices gave people false sense of artificial affordability at the pump and as a result private vehicle usage shot up
- Points out unrevised expressway tolls despite general surge in transport costs is a good example of wrong transport sector policies
Even after the jumbo hikes in the fuel prices a couple of months ago to bring energy prices to cover full cost and to
cut losses at the Ceylon Petroleum Corporation (CPC), Sri Lanka’s prices at the pump still remain the lowest for a non-oil producing country in the world, according to a transport sector expert.
Sri Lanka raised its fuel price at the pump to at least thrice the level it was, in a matter of months as it became impossible to continue to subsidise the prices following the Russia-Ukraine war sending global energy prices soaring, bringing the Sri Lankan economy crashing down after exhausting its foreign currency reserves.
“I am not exactly sure what the situation is now, but two months ago even after the increase in fuel prices, Sri Lanka’s pump price was one of the lowest in the world for a non-oil producing country,” said University of Moratuwa Senior Professor Amal Kumarage.
Speaking at a webinar organised by the Centre for Banking Studies of the Central Bank last week, the academic put the blame for the current sorry state of the energy and transport sector on the Treasury for its wrong pricing policies adopted for decades where it continued to subsidise the true cost of energy, giving the people a false sense of artificial affordability at the pump.
He said these wrong pricing policies had made private vehicles use in Sri Lanka excessively subsidised, effectively incentivising it, while allowing the public transport system to decay.
While the transport cost has soared manyfold since the economy’s crash in March, he said the expressway tolls still remain unrevised. “So we have actually subsidised what other countries tax,” Prof. Kumarage added.
He said Sri Lanka’s highly lopsided transport sector policies and wrong pricing have caused huge imbalances in both the economy and the demography as seen at present.
The ongoing crisis, the worst since the country’s independence, has sparked the interest among many across ideological and political spectrums about the need for a sustainable transport sector, which had been long neglected.
Prof. Kumarage said the Treasury is more obsessed with short-term taxes it collects from vehicle imports and the fuel sales, but more damage had been caused under its nose as it no longer can provide fuel to the colossal amount of vehicles it allowed coming into the country.
“ So, we have been going on with this very mythical belief of a short term tax revenue but actually you are burning the candle at the other end and finally the economics have caught up with us,” he said.
He recalled a case where a proposal was made a few years ago to modernise the entire bus transport system by bringing in 25,000 new buses with modern features, costing only a billion dollars the most.
But, it never took off and instead Sri Lanka has been spending over US$ 3.0 billion annually for fuel while at least US$ 15 billion remains locked in, in the country’s private vehicle stock.
G de S Wednesday, 21 September 2022 07:53 AM
Wonder what Agitators', Unionists' and Opportunistic Politicians' view on SL's fuel price.
Leo Wednesday, 21 September 2022 08:09 AM
The importation of modernized buss's will take more time as the ministers are in the process of still figuring their percentage on this.
Ama Yatagama Wednesday, 21 September 2022 08:23 AM
The so called “non oil producing countries” means they have higher per capita income also very much higher than Srilanka. It is highly unfortunate a learned professor analize the fuel price ignoring income level of the citizens.
anthony Wednesday, 21 September 2022 08:46 AM
I do agree with Professor where Sri Lanka is yet the lowest in the world, the people feel the increase and cost of living since prices go up, but the income remains the same, and politicians provoke things without explaining things.
Roshanaly Wednesday, 21 September 2022 08:54 AM
How about comparing the wages with other countries
Mohammed Ameen Wednesday, 21 September 2022 09:02 AM
What about our salaries? Higher than most countries in the world?
janp Wednesday, 21 September 2022 09:11 AM
LOWEST OIL PRICES FOR SRILANKANS BUT ENTIRE VERY OLD CORRUPTED POLITICIANS GETTING PETROL QUOTA'S FREELY PLUS OTHER FACILITIES SUCH AS FLEETS OF VEHICLES, SUV'S, MANSIONS, ELECTRICITY,WATER MEDECARE, EXPENSIVE FOODS AT SUBSIDARY COST,FOR ENTIRE FAMILIES WHILE SRILANKANS HAS TO PAY FOR EVERYTHING AT HIGHEST COST AT THIS CONTINOUS MOMENTS WHILE THEIR SALARIES IS LESS THAN RS, 25000,/ OTHERS HAS OVERHEAD EXPENSES FOR THEIR REQUIREMENTS
Mizaru Wednesday, 21 September 2022 09:42 AM
The lowest wages in the as compared to the developed countries. This is the type of professors Sri Lanka universities have. This is why Sri Lanka is still an underdeveloped country. It is not. developing country.
Ranil Wednesday, 21 September 2022 10:00 AM
This is true, but we public wants staff reductions for CPC to be efficient.
tikiri bandara Wednesday, 21 September 2022 12:33 PM
wasn't he the one who was opposing the light rail project and the kelani valley railway line? his cost estimations keeps on changing each time he makes a statement. can recall him going on and on in derana program that whole Western province buses can be modernized for 100 million. now says 1 billion but remember him saying close to 1 billion rupees needed for whole sri lanka once. Even that number seems to be wrong. Looks like this professor just gives numbers to justify his statement. Someone should demand his calculations and look at his past statements on how they have changed in time to time
perera Wednesday, 21 September 2022 12:57 PM
Another fool giving a load of bull to justify the mismanagement of the economy, just like the one who compared the price of bread with that of Europe. It is the earnings that should be compared. A person in Europe earns 4 to five times more than a SriLankan. How can he come out with such a skewed comparision.
Wrong, Wrong wrong Wednesday, 21 September 2022 05:00 PM
Sadly it our culture to be shortsighted and support for vehicle imports. It's every middle class family aspiration and nothing is going to change that anytime soon. The academic has missed a very big cause for the problem of excessive vehicles. About government looking allowing state sector employees for easier access to vehicles was the worst mistake ever. Allowing for no tax on their earning, and allowing professional or higher level employee to get car import permit is just bad form. Developed countries tax state employees just like private sector employees, and they get no special benefits from the state - no car permit providing idiocy. Maybe the academic has wife or himself used the every five year vehicle permit to by vehicle so conveniently hides about because of his own conflict of interest that way. The Daily Mirror should use the information by the academic and provide are more balanced and unbiased opinion.
Samantha Hetti Wednesday, 21 September 2022 09:29 PM
@Wrong, Wrong wrong The so-called academic was speaking at the Central Bank, and those people there get these lavish vehicle allowances so he would never speak about it them. Those are also state employee getting those very vehicle permits. Daily Mirror show up this hypocrisy!
Always take his talk with grain of salt Wednesday, 21 September 2022 09:42 PM
He cannot justify situation with we have low price as non-oil producing country if other non-oil producer have much higher wages or family income. Our country has much malnutrition, again because we have many who are poor, so people can't afford food. So even if he thinks our fuel prices low, the price is really too high for our public. Where did Kumarage get his grand qualification. The University of the Ponnaya? Or is he a paid stooge for the Central Bank.
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