• Public urged not to queue

The Government yesterday (29) denied any fuel shortage in the country and urged the public not to form queues, as it moved to absorb a further Rs 40.65 billion in diesel costs over the next three months amid rising international petroleum prices.

Cabinet Spokesperson Dr. Nalinda Jayatissa said there was no shortage of fuel, noting that the Ceylon Petroleum Corporation (CPC) and other fuel companies had imported sufficient stocks to meet domestic demand.

"There is no shortage of fuel in the country. The CPC and other companies have imported sufficient stocks. Therefore, there is no need for the public to form fuel queues," he said.

His remarks came as the Government confirmed that Cabinet had approved a further allocation of around Rs 41 billion from the Treasury for a three-month diesel subsidy from October to December, with Rs 15 billion to be provided in October, Rs 13.5 billion in November and Rs 12.15 billion in December.

The subsidy will apply to auto diesel and industrial diesel and is aimed at preventing rising international fuel prices from being fully passed on to domestic consumeRs

Speaking at the weekly Cabinet of Ministers media briefing, Dr. Jayatissa said the Government would seek to bear the maximum possible share of rising fuel costs to limit the burden on the public.

He said the decision was taken in response to higher international fuel prices and their wider impact on the prices of goods and services. When fuel prices rise, he explained, the prices of goods and services can also increase, while subsequent reductions in fuel prices do not necessarily result in an immediate or corresponding decline in those prices.

The Government had therefore decided to use Treasury funds to absorb as much of the additional fuel cost as possible and provide relief to consumers, he said.

Under the current Treasury allocation, the three-month subsidy will be directed towards diesel rather than petrol. Fuel prices will continue to be calculated monthly, with the Government covering its allocated share of the cost.

Further decisions on fuel pricing and the management of the subsidy will depend on developments in international markets.

Dr. Jayatissa also said that the Treasury had provided more than Rs 100 billion in fuel subsidies over the past six months, as the Government sought to absorb a significant portion of the rising cost of fuel.

The decision was made when the Cabinet convened on Monday (28) under the patronage of President Anura Kumara Dissanayake.

On 26 September, President Dissanayake announced the three-month subsidy at a public rally in Gampaha, saying that it would cover October, November and December.

The announcement came amid a sharp increase in international fuel prices, with the Government seeking to prevent the full impact of global price increases from being passed on to domestic consumers.

International diesel prices have risen significantly compared with earlier this year, while petrol prices have also recorded substantial increases. However, domestic fuel prices have increased at a slower rate, according to Ministers and Government-affiliated sources.

The Government had previously introduced fuel subsidies to cushion consumers from rising global petroleum prices. During an earlier three-month period, it provided assistance on diesel and petrol prices to limit the impact of international market fluctuations on local consumeRs

Under the latest subsidy programme, the Government is expected to provide financial support to the CPC to offset the higher cost of importing fuel.

The latest intervention is intended to provide temporary relief to consumers and businesses while limiting the immediate impact of international fuel price increases on the domestic market.