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Fuel Price Stabilisation Fund in the making  

27 Nov 2021

  • Cabinet approves proposal presented by Energy Minister in March
  • Seven-member fund to be appointed within the next few weeks
The Government is in the process of forming a fuel price stabilisation fund in order to address the country’s fuel crisis. The Cabinet of Ministers, at the last Cabinet meeting, had approved the proposal presented by Energy Minister Udaya Gammanpila on 15 March 2021 to implement a fuel price stabilisation fund in order to address the country’s fuel price issue. The setting up of the seven-member fund is expected to take between two to three weeks. The fund, it is learnt, will be headed by an Additional Secretary of the Energy Ministry and will include the Director General of the Fiscal Policy Department, representatives of the Ceylon Petroleum Corporation (CPC) and the Lanka Indian Oil Company (LIOC), a statistician from the Energy Ministry, as well as a representative each from the Transport and Fisheries Ministries. Fuel prices will be decided by the Fuel Price Stabilisation Fund once it is appointed, instead of being decided by the Energy Minister in consultation with the Finance Minister, as it is done now, a senior government official told The Sunday Morning. However, a senior energy expert, on condition of anonymity, told The Sunday Morning that the timing of the fund was not the best, as the fuel market was on an escalation path. “Price stabilisation funds for fuel work when markets are sliding. In the case of Sri Lanka, the fund will commence operations with zero funding. The Treasury, therefore, would have to provide a block transfer for the fund to operate as planned,” the expert opined. Gammanpila as well as several senior ministers of the Government were recently quoted as stating in Parliament that the Government would have to put in place a pricing formula for fuel or set up a price stabilisation fund to address the issues that have risen over fuel prices. (MIA)


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