Kerosene sees biggest rise

Friday, 11 May 2018 00:00 - - {{hitsCtrl.values.hits}}

Those living below the poverty line are likely to be hit hard by the introduction of the new fuel pricing formula as the Government yesterday increased the price of kerosene by 56% from Rs.44 to Rs.101, the highest upsurge the market has seen in recent times though Finance Minister Mangala Samaraweera differed.

Finance Ministry said it had decided to continue the subsidy given for kerosene for certain segments of society includingthe fishing community, lower-end Samurdhi beneficiaries and the sizable number of estate workers who use kerosene for cooking and lighting purposes.

“All those registered in the Gramasewaka Divisions will continue to get kerosene at the old price of Rs.44 a litre with immediate effect. We will provide them with coupons or direct money transfers to their banks from 1 June so they can purchase kerosene as they did previously,” Finance Minister Mangala Samaraweera told journalists in Colombo.

Low-income communities use kerosene to a great extent, with all successive governments intermittently issuing kerosene to people as a subsidised product.

Even though this subsidy was borne by the Government for the CPC in respect of the kerosene subsidy last year the loss was around Rs.5.4 billion.To provide a litre of kerosene at Rs.44, the subsidy on that behalf was Rs.27.53.

A study conducted by the Petroleum Resources Development Ministry has observed that the use of kerosene had increased drastically during the past three years from 138,505 kilolitres in 2014 to 198,090 kilolitres in 2017. This was not due to real demand but due to corrupt businessmen misusing the subsidised kerosene for heavy vehicles and industrial purposes.

The Ceylon Petroleum Cooperation (CPC) data showed that the average monthly sale of kerosene was around 350-400 MT in 2017, while it went up to 600-650 MT during this year.

Sources said that the unprecedented growth in kerosene sales was unlikely linked to rebound in buying by poor households but trade including private bus operators and others including some fuel stations engaged in adulteration. Recently CPC clamped down on errant stations alleged to have been caught in the act.