Saturday 2nd September, 2023

No sooner had the CPC (Ceylon Petroleum Corporation) jacked up fuel prices again than the Ministry and Power and Energy announced its decision to abolish the QR-based fuel rationing scheme. The government has sought to divert the people’s attention from the fuel price hikes, which have sent the public reeling.

The fuel quota, no doubt, served a very useful purpose. In fact, it should have been introduced early last year when the first signs of a fuel shortage appeared. But it became redundant when the fuel supply improved.

The QR-based rationing system worked during last year’s crippling fuel shortages, which led to riots near filling stations and plunged the country into chaos, with desperation driving the public to buy fuel at black market prices and unscrupulous elements hoarding petrol and diesel. But exponential price increases had the same effect as rationing on the demand for petrol and diesel after the restoration of the fuel supply and the subsequent increases in the fuel quota. The rich who needed extra fuel for their gas guzzlers had no difficulty in obtaining it; they only had to grease the palms of pump attendants.

When the CPC revises petroleum prices, its unusually high overheads and staggering losses due to corruption, waste and mismanagement are invariably factored in. Its ‘competitors’ readily match its prices, which are kept unfairly high, and make a killing. Therefore, the public does not gain from the entry of foreign companies into the fuel retail market.

Sinopec, the new kid on the block, sells its products at marginally lower prices, at present, but it is likely to emulate LIOC (Lanka Indian Oil Company) and match the CPC prices in time to come and maximise its profits.

It is only wishful thinking that the CPC and its ‘competitors’ will not collude to keep the petroleum prices high. Neither the government nor the CPC feels for the Sri Lankan public, and when they exploit the people by increasing fuel prices, the foreign companies will do likewise.

The latest 35-rupee diesel price increase has already pushed the transport costs up again. Transporters are given to making unconscionable profits, and will make the most of the fuel price hike. Private bus operators lost no time in demanding and obtaining a fare hike. There will be an increase in the general prices level, as a result, and it will be a double whammy for the ordinary public, especially the fixed income earners and the poor.