- Govt. reduces fuel prices as world oil prices rise By The Sunday Morning Business Desk The Government reduced fuel prices on Thursday (10) as scheduled under its fuel price formula despite world prices having seen a sharp increase since the last revision in December. This appears to run counter to the purpose of the fuel price formula, which was to establish cost-based pricing which reflects global oil prices and end ad hoc price changes for political expediency. Global prices have been bolstered by encouraging signals from the US-China talks to end a potentially devastating trade war as well as The Organisation of the Petroleum Exporting Countries’ (OPEC) gradually implementing production cuts. From 22 December to 10 January, the price of a barrel of petrol increased by 6.2%, while a barrel of diesel increased by 5.4%. However, despite the rise in global oil prices, on Thursday, Sri Lanka reduced the price of a litre of 92 Octane petrol by 1.6%, 95 Octane by 1.3%, Auto Diesel by 2%, and Super Diesel by 2.5%. Interestingly, the Ministry of Finance made note of the rise in world prices in a statement announcing the fuel price reduction. "However, since the second week of January, the crude oil price and the prices of refined products are reported to be on the rise. The crude oil represented by the BRENT price index and the refined petroleum prices represented by Singapore’s PLATTs price are moving upward and by 10 January it had gone up to $ 59," it said. This appears to be an indirect way of saying that while global prices are going up the Government has brought down the prices so as not to burden the voting public. The unscheduled and delayed fuel price revision last month was a result of the political crisis which began on 26 October and lasted for 51 days. During this 51-day period, fuel prices were reduced thrice by current Opposition Leader Mahinda Rajapaksa in his capacity as the Prime Minister and the Minister of Finance and Mass Media, in spite of the existing fuel price formula. In fact, less than a week after coming into power, his Government announced plans to abolish the fuel price formula, which was introduced by the current Minister of Finance and Mass Media Mangala Samaraweera in May, 2018, under the committed structural benchmarks of the International Monetary Fund (IMF). Following approval from the Cabinet of Ministers, it was agreed that the fuel price formula would be revised on a monthly basis due to insufficient technology to revise it on a daily or a weekly basis. The table which accompanies this article reflects the changes in the local and global fuel prices between the two local fuel price revisions.