What went wrong, according to Udaya

By Rathindra Kuruwita

The increase in fuel prices in the world market is not the only reason why the price of fuel has skyrocketed, former minister of energy, Udaya Gammanpila, said yesterday, addressing the media.

“The government mismanaged the foreign reserves, and it artificially held the rupee up for over a year.  Both these led to a draining of the hard currencies we had,” he said.

Gammanpila said that the government continued to import non-essential goods at the expense of items the country should prioritise. He added that in March 2021, he proposed to the Cabinet that a fuel stabilization fund should be created.

“I presented a well-thought-out plan to the Cabinet. After a long debate, a ministerial sub- committee was appointed to investigate my proposal. They approved it and then the Ministry of Finance took time to study it. That was the last we heard from them, they are still considering the proposal I guess. If we established the fund, we could have cushioned the crisis,” he said.

Gammanpila also added that the government made Rs. 750 million a day from taxing fuel. The government could have reduced the burden on the people by reducing the tax, he said.

“When prices go up, we place the entire burden on the people. There are things that the government could have done. We should have rationalized our spending,” he said

The former energy minister also responded to some government ministers who claimed that the shortage of diesel was created by his warnings of fuel shortages.

“Let’s assume that the diesel shortages are my doing. There are shortages in cement, gas, milk powder, medicines, iron, etc. Are these items in short supply because respective ministers had warned of shortages? These items are short because we have a shortage of hard currencies. This was brought about by economic mismanagement,” he said.