Finance Ministry seeks more time to reduce oil prices

by Rukshana Rizwie

The Finance Ministry has sought more time for a mechanism to reduce fuel prices in keeping with world oil prices, which are at an all-time low. This follows a proposal submitted by Petroleum Resources Development Minister Chandima Weerakkody to the Cabinet.

The Minister told the Cabinet on January 13 that Finance Ministry officials sought more time to implement a reduction in oil prices. “We are yet to make our observations on this matter, as it needs time,” a Secretary to the Treasury and Ministry of Finance Dr. R H S Samaratunga told the Sunday Observer.

World crude oil prices had plummeted to a record low by Friday to USD 29.88 a barrel. The world market price of crude oil crashed to a 12-year low for the first time since 2004. Banking groups including the Standard Chartered had predicted it could even reach USD 10 a barrel – a level not seen since 1998.

Secretary to the All Island Consumer Rights Protection Association Mahen Deva told the Sunday Observer the benefit of the reduction in oil prices were yet to be passed on to the consumer. “As a responsible Association we call upon the Government to reduce the price of diesel to cut down on transport costs.”

The cost of importing a litre of oil to Sri Lanka is around Rs. 27.25. However, the local market price of a petrol litre is Rs 117 and a litre of diesel is Rs 95. Based on the new price levels, the Association spokesman said the price of petrol and diesel could be reduced to Rs.90 and Rs.70 a litre.