Subsidies to offset oil price hike

Fuel subsidies for buses, three wheelers, fishermen:

Ishara MUDUGAMUW A

Strike called off

Chaminda Perera

Private bus operators yesterday called off their trade union action after an agreement reached to increase bus fares by 20 percent, during a meeting between the government and private bus operators at the National Transport Commission.

The bus fare increase was effective from midnight yesterday.

Thousands of commuters including schoolchildren were stranded following the strike launched by the Private Bus Operators' Association since Sunday midnight in defiance of the fuel subsidy announced by the government.

Accordingly, the minimum bus fare has been increased from Rs 7 to Rs 9. An official of the National Transport Commission told the Daily News that both parties agreed not to revise the bus fare hike due in July.

He said that the bus fare will not be increased until February 14 next year if there is no fuel price hike during this year.

Meanwhile, Lanka Private Bus Operators' Association president Gemunu Wijeratne requested bus operators to commence their services forthwith .

Passenger Transport Minister C B Ratnayake, Transport Minister Kumara Welgama and National Transport Commission officials were present at the meeting.

The government will never place the burden of the recent oil price increase in the world market on the consumer, Environment Minister Anura Priyadarshana Yapa told the media at the Information Department yesterday.

“The whole world is suffering from the oil crisis due to the conflict in certain Middle Eastern countries,” he said.

‘Due to this situation, oil prices are very high in most countries compared to Sri Lanka. (Norway – Rs 300, Canada – Rs 152, Brazil – Rs182, Australia – Rs 177, Denmark – Rs 144, Kenya – Rs 154, Japan - Rs 227, and India – Rs 164). Though the situation in the world is of this nature, the Sri Lankan government has taken measures to provide oil subsidies for selected groups such as bus owners, three wheeler owners, and fishermen, with the objective of reducing their burden, ” the minister said.

Petroleum Industries Ministry Secretary Dr R S H Samaratunga said that the use of oil in Sri Lanka is at a very low level compared to other countries.

“We cannot complain regarding the increase in oil prices in the world market.

The government over the years has been providing an oil subsidy to the public though the Ceylon Petroleum Corporation incurring a big loss.

About a Rs 24 billion loss was reported in 2010 and it was Rs 89.8 billion in 2011. If the government doesn’t increase prices, the loss this year will be Rs 88.5 billion.

In these circumstances, the government cannot provide any further subsidy without increasing prices.

With the increase in oil prices, the corporation can reduce its losses up to Rs 63.6 billion,”?he said.

Fisheries Minister Rajitha Senaratne said that there are 4,811 diesel powered fishing vessels and 21, 551 kerosene - powered fishing vessels in Sri Lanka.

“The oil price increase directly affects fishermen. President Mahinda Rajapaksa is concerned about this and he directed us to provide subsidies to the fishermen.

The government always tries to solve problems faced by fishermen. They have been released from taxes.

The government has also introduced a special insurance scheme for them and has provided loan facilities. Some people try to create problems to further their private purposes.

Fishermen should not worry about this,” he said.

Power and Energy Ministry Secretary M C Ferdinando said the Ceylon Electricity Board (CEB) is another institution that is affected by the recent oil price increase.

“The CEB has to spend an additional Rs 40 billion for electricity generation due to the oil price increase.

We have reported our problems to the Public Utilities Commission and they will decide what should be done to reduce this burden,” he said.