Sri Lankan government says benefit of declining global fuel prices will be passed on to local consumers
The government of Sri Lanka has reduced local fuel prices in line with the price fluctuations in global oil prices according to the fuel price formula.
According to reports, the price formula introduced by the government has resulted in the reduction of the price of petrol and diesel by Rs.30 and Rs.20 per litre respectively when compared with the last price increase on October 10 this year.
The government has explained that bus fares and charges in the transport sectors such as, three wheelers and school vehicles should be reduced proportionately in order to pass the benefits of the global fuel price reduction to the people.
The local media has reported that the government expects the regulatory institutions which are responsible for the transport sector would take necessary action to ensure that the benefits of the fuel price reduction passed on to the passengers.
The government has reportedly noted that fisheries and other transport sectors should also pass on the benefit of the fuel price reduction to the people as the production and transport costs of such sectors have declined following the decrease of diesel price. This would create a tendency of reducing the prices of goods and services thereby helping to cut the cost of living effectively.
The Cabinet of Ministers approved the fuel price formula in May, 2018 to decide the fuel prices in the local market based on the price fluctuation of crude oil in the Singapore market.
The Treasury has used the then prevailing price of a barrel of crude oil in the Singapore market in this practice.
The move by the Sri Lankan government to ensure price reductions in local fuel prices in line with the global oil prices would be an added incentive to many businesses in the country. The local fuel price formula will keep prices on par with international prices thereby help in the planning of businesses while also improving profit margins when prices decline.
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