Govt. forgoes Rs. 65 b revenue to cut fuel prices

Friday, 23 January 2015 00:09 - - {{hitsCtrl.values.hits}}

Minister Ranawaka urges transport sector and distributors to pass relief on to consumers
Says CEB indebted to subsidise low interest loans for former Defence Secy’s projects

The Government will lose Rs. 65.5 billion in annual revenue by slashing fuel prices since most of the reduction has been as a result of tax cuts, Power and Energy Minister Champika Ranawaka said. President Maithripala Sirisena’s manifesto said the price reductions would only cost Rs. 40 billion to the State coffers, but the Government had decided to incur the further Rs. 15 billion loss, Minister Ranawaka said. Despite the relief package, the new administration will not increase expenditure above the funding allocated in the 2014 Budget passed last November, Minister Ranawaka explained. Future revisions will be based on a transparent formula for fuel pricing and electricity tariffs to be introduced mid-year, Ranawaka explained. He vowed that CEYPETCO would become a transparent, corruption-free State institution, with a new management structure. “It was a special feature of Rajapaksa rule that it heavily taxed essential items and fuel and energy, while being lenient on tobacco and alcohol, the usually high revenue-earners for the State,” Ranawaka explained. Minister Ranawaka said that former Defence Secretary Gotabaya Rajapaksa had obtained a low interest loan from a state bank to build a private university, subsidised by a loan taken at high interest by the Ceylon Electricity Board which was passing on the burden to consumers. “These were the tragedies behind the beautification drive to make roads and buildings,” the Minister charged. Ranawaka said the CPC was paying Rs. 18 billion annually to state banks as interest. Minister Ranawaka urged the transport sector and fuel distributors to pass on the relief to consumers with immediate effect or face the consequences. “We are making this request of fuel distributors and transport service providers. If they do not comply, the law will be enforced. Whenever the prices are increased, the burden is passed on to the consumer very quickly. So follow the same policy,” the Minister urged. (DB)