No immediate reduction in fuel prices: Government

• Proposals submitted to Cabinet but no decision taken yet 
• Discussions to continue over next few days
• Minister says Govt. wants to give sustained price reduction
• Proposes bilateral talks with oil-producing countries to establish contracts while prices low 

The Government is yet to make a decision on whether to reduce fuel costs, despite the significant drop in global fuel prices, but will hold discussions in the coming days to make a decision, a top official said yesterday.

Addressing the media, Power and Energy Minister Mahinda Amaraweera said the Government was considering risk management strategies to procure oil at reasonable prices. 

“I made a request from the President to hold discussions between governments so that we can directly form contracts with them while prices have dropped,” he said.

He added that the tendering process takes time, thus purchases cannot be made immediately and there are additional costs like freight that the Government must take into consideration when reducing fuel prices.

Amaraweera said they were still studying the fuel price drops, which were a result of a price war between Saudi Arabia and Russia. While adding that the Organisation of the Petroleum Exporting Countries (OPEC) held a discussion on the situation on Thursday, the Minister said they could not be certain if the standoff between the two countries would continue.

“If we are reducing the price, we want to do so in a way that the price reduction can remain the same for a significant amount of time. We don’t want to reduce it this week and then increase it next week,” Amaraweera commented, adding that the Government did not want to make any changes to the price of fuel targeting the forthcoming General Elections.

However, the Government has been holding discussions over the past few days and has been looking at ways in which the general public, especially the common man, can benefit directly from fuel price reductions.

“There is uncertainty over if sudden decisions will actually reach the public. When there are prices changes, the way it is felt by the public is different,” he said, adding that a reduction in fuel price should also mean reductions in public transport fares, as well as private transport fees.

The Government is also looking at alternative relief programs where the public will still benefit from the price reductions even if it not in the form of local price drops. Suggestions have been presented to Cabinet, Amaraweera said, adding, “We are monitoring things to see if this is a temporary situation and we will implement relief programs in the next few days.”

Amaraweera also emphasised that the Government would at no point profit from the drop in global fuel prices. (SWA)