No ministry has so far requested fuel price relief for affected parties: Cabraal

Despite various claims to the effect of readiness to provide fuel at a subsidised rate, the State Finance Minister, Ajith Nivard Cabraal said so far no one or no ministry had requested concessions for the parties affected by the increase in the fuel prices fortnight ago.

The government was forced to revise fuel prices upwards two weeks ago in response to continuously increasing global oil prices, as the prices rose by 70 percent to US$ 73.22 a barrel in the year through June 18, 2021, as the country’s economic buffers were running thin due to restrictions imposed since the third week of April. 

“If relief should be given to a certain section, proposals have to come from the ministries, but so far nobody has made a proposal to that effect,” said Cabraal, the State Minister of Finance, Capital Markets and State Enterprise Reforms last week participating in a television interview.

At the same vein he emphasised that while he isn’t against providing relief, such relief should be highly targeted to ensure that they go only to the deserving segments. 

Soon after increasing the fuel prices at the pump, the private bus owners demanded up to 25 percent increase in bus fares if they are to continue to carry passengers at the seat capacity under the fresh guidelines issued by the heath authorities since last year. 

However, State Minister of Bus Transport Services Dilum Amunugama was quoted as saying on June 12 that there would not be any upward price revision, instead the bus owners would be provided with a concession. 

“We will not increase the bus fares but will give certain concessions to bus owners, such as fuel reliefs or an allowance instead of a fare hike,” Amunugama said while acknowledging that it was necessary for the bus owners to stay afloat under the new fuel price structure. 

Bus fares were raised by as much as 20 percent last November after bus owners were asked to carry passengers not exceeding the seat capacity. 

Another faction which called to reinstate fuel prices was the fisheries sector, which got beaten from multiple fronts— initially from the less demand due to virus related restrictions and then the fishing was barred from Kalutara to Negombo soon after a ship gutted off the seas, potentially contaminating the fish in those areas. 

In any case the government is unlikely to achieve their desired goals from revising the fuel prices up if they are compelled to provide broad base relief as the prices were revised with the intention of easing the external sector pressure and also to ensure institutional stability involved with power and energy sector players and the banks which provide financial support to them.