Sri Lanka fuel prices will remain unchanged for now despite lower global oil prices, as subsidy removal offsets market relief.
Sri Lanka fuel prices will have to remain at current levels for some time, even though crude oil prices in the world market have fallen to some extent, State Minister of Finance Anil Jayantha said.
The Minister made the statement during a discussion with Derana Television.
Explaining the government’s fuel subsidy program, the Minister said a subsidy of Rs. 100 per litre for diesel and Rs. 20 per litre for petrol had been provided for a period of three months.
The subsidy scheme, which began in April, is scheduled to end in June.
The Minister said the main reason fuel prices have not dropped locally, despite the decline in global market prices, is that the government has already been controlling prices through the subsidy.
He explained that if the government decides not to continue the subsidy after June, fuel prices are likely to remain at present levels because the benefit of lower global prices and the effect of removing the subsidy would cancel each other out.
The Minister also said the government’s revenue position is currently strong, with state revenue being collected at around 100 to 120 percent of the target.
However, he noted that the government is committed to gradually removing all energy subsidies and other relief measures by the end of September, in line with agreements reached with the International Monetary Fund.
The Minister added that only if global market prices fall further in the future can the government consider passing that relief on to the public. He also said the government is prepared to intervene if external factors cause prices to rise unexpectedly.
