New fertiliser and fuel subsidies not election promises, claims Bandula

Cabinet Spokesman and Minister Bandula Gunawardena

Cabinet Spokesman and Minister Bandula Gunawardena on Thursday claimed that the new fertiliser and fuel subsidies approved at this week’s Cabinet are part of the 2024 Budget and not political promises ahead of upcoming elections.

Responding to queries at the post-Cabinet meeting media briefing, he asserted that these subsidies align with the fiscal framework established under Government. 

Gunawardena stressed that the days of using such subsidies for electoral gain are over. “All the concessions extended are within the fiscal framework we are operating in. These are implemented according to the country’s legislations and ordinances,” he stated.

Last Wednesday, the Cabinet of Ministers approved a Rs. 25 litre subsidy for diesel and kerosene oil, specifically targeted at the fisheries community. Additionally, a fertiliser subsidy of Rs. 4,000 for tea growers was also approved. Both subsidies are effective from 22 August.

Gunawardena explained that the fisheries sector has faces significant challenges due to the economic downturn and rising fuel prices. “Owners of fishing vessels have faced increased operational costs, limiting the number of vessels that can be deployed. To mitigate these challenges, Cabinet approved Rs. 25 per litre allowance for diesel used in fisheries vessels, available for six months.

An additional allowance of Rs. 25 per litre of kerosene will also be provided for up to 15 litres per day for 25 days each month to fishermen using kerosene as fuel,” he explained.

The Cabinet Spokesman also highlighted the Government’s commitment to ensuring food security and boosting agricultural productivity. 

“A subsidy program was introduced to provide fertiliser at a competitive price for farmers cultivating paddy and other crops. The State Fertiliser Company Ltd., along with private sector entities will import the fertiliser. Thereby, the farmers will get a subsidy of Rs. 4,000,” he added. 

In addition, he said a financial subsidy of Rs. 15,000 per hectare, capped at two hectares will be offered amounting to a maximum subsidy of Rs. 30,000.

Gunawardena underscored that these initiatives are part of broader economic measures to stabilise the economy. 

He described the Central Bank Act, Public Debt Management Act, Public Finance Management Act, Economic Transformation Act and Anti-Corruption Act serve as five protective mechanisms (Pancha Ayudha) to prevent the country from experiencing another economic downturn. 

“All these initiatives are carefully crafted within the legislative frameworks to ensure the country remains on a path of economic recovery and growth,” he stressed.