Finance Minister Mangala Samaraweera said the savings of Rs. 55.89 billion by the removal of the fuel subsidy throughout the year, will be utilized on a special rural development program titled Gam Peraliya to boost the rural economy under the regional development program of the government.
“We would be able to save over Rs. 55 billion from the fuel price revision that was inevitable given the loss incurred by the CPC. We had to increase prices of fuel in line with the global oil prices which as we speak stand at US$ 77 a barrel,” the Minister said while addressing the media on the new pricing structure for fuel approved by the Cabinet last week. The pricing structure of the price of fuel will be revised every two months and the price revision will be announced on the fifth after the lapse of the second month. “The overall price increase is less compared to price increases under the former regime under Mahinda Rajapaksa who jacked up prices when oil prices in the global market were around US$ 48 per barrel. We have not done that but rather made adjustments in a fair manner,” Samaraweera said.
He said the good governance government gave the maximum benefit to people in 2015 by reducing fuel prices considerably compared to 2014 by bringing down Octane 92 from Rs. 157 to Rs. 117 and Octane 95 to Rs. 128 from Rs. 158 under the Rajapaksa regime.
“Our fuel prices are low compared to the prices in many of the regional countries. The price of Octane 92 in India is around Rs. 160 and much higher in Bangladesh and Nepal.
To ease the burden on Samurdhi beneficiaries and low income segments such as the small boat users of the fishery community using kerosene, the old price for kerosene oil will be offered,” the minister said.
“We will have provisions for downward revision as well, when global oil prices come down. As forecasted, we expect global oil prices to come down by the second quarter next year,” the minister said.
Accordingly a litre of petrol (92 Octane) has been increased to Rs. 137, 95 Octane to Rs. 148 and auto diesel Rs.109.
The minister attributed the new situation with regard to sanctions on Iran where Sri Lanka will have to import via another country which will not be Iranian oil.
The price of a barrel of crude oil could go up to US$ 80 due to the situation in Iran.