Petrol, diesel and kerosene - are prices imposed reasonable and logical?

Major General Gratiaen Silva (Retd)

FUEL PRICE: Petrol, diesel and kerosene prices have been increased, once again. This is due to the further increase in crude oil prices in the international market. Obviously this trend will continue putting the Government in a spin because of the effects on the cost of living.

Petrol, diesel and kerosene are sold by the State owned Ceylon Petroleum Corporation at subsidised prices to provide some relief to the people at large. However, the subsidies are equally extended to all citizens, the rich and the poorest of the poor. No differentiation is made by the State between those utilizing these for non essential luxury purposes and those utilizing these for absolutely essential survival purposes. Is this fair and justifiable?

An important fact to be noted is that these commodities are imported products and not locally produced at all. Therefore, except for the poorer classes of our society, is there any justification in providing, these subsidies to all and sundry?

Cars and vans are owned and used, except in a few rare instances, by persons of affluence, such as high ranking officials in the private sector, businessmen and politicians.

Is it, therefore, reasonable and fair, that the State subsidise the petrol and diesel consumed by the owners of these vehicles? Is there a moral justification for the State to provide this commodity at a subsidised price to all these private vehicle owners?

It is my view that petrol and diesel should be provided to the users of these private vehicles at the actual cost to the State, with no subsidies at all. Of course in the case of public servants and politicians provided with official vehicles, the government will be paying for the petrol and diesel anyway.

Where petrol and diesel is used for poor people's vehicles, such as three wheelers, motorcycles, scooters, a well organised, planned and controlled subsidy scheme, which cannot be abused, needs to be adopted to help these vehicle owners. The added advantage of non-subsidised provision of petrol and diesel, at actual cost, to car and van owners, is that it will greatly reduce the number of vehicles on the roads and provide relief to road users in that manner as well.

Obviously the subsidy provided for diesel, to both the public sector and private company owned buses for purposes of public transport, will have to continue to be provided, as this is the poor mans means of transport. Therefore, here too, the scheme has to be modified to continue a State subsidy for these vehicles. This action, along with unsubsidised petrol for cars, will encourage greater use of bus transport instead of cars.

There is no moral justification to provide privately owned luxury buses with state subsidised petrol or diesel. The charge for the petrol or diesel for these vehicles should be what it actually costs the State. Kerosene is mainly used by the poorest sections of our society. Hence the maximum possible subsidy should be provided to these users.

However, where this commodity is used in bulk by private industrial organizations, there is no justification to provide kerosene at a subsidised price to industrial users.

The government has to adopt a sensible policy in providing subsidies, for these products, confining these subsidies only to the most deserving and needy in our society.

The present manner of blindly providing subsidies, for an imported product, to all and sundry, from the riches to the poorest, in like manner, to say the least, seems plain stupid.

Lest I be misunderstood, let me state categorically that I am also a private vehicle owner.

Trust the minister concerned will open his eyes and mind to these thoughts and ensure that State subsidies are provided to only the deserving and needy and not to the posh and the luxury seekers!!