The Government is to continue with the existing fuel cost subsidy, under which the State currently bears Rs. 100 per litre of diesel and Rs. 20 per litre of petrol, with the International Monetary Fund (IMF) not opposing it so far, the Energy Ministry stated.

Responding to queries by The Daily Morning yesterday (30) on whether the IMF had approved the continuation of the subsidy, Ministry Secretary Prof. Udayanga Hemapala said that the Fund had not objected to the arrangement at present. "We can continue the current arrangement. The IMF has not opposed it."

Cabinet Spokesperson Dr. Nalinda Jayatissa said recently that the Government is currently absorbing about Rs. 20 billion per month to cushion the impact of fuel costs on consumers. He warned that if the Government is to bear the full cost of fuel imports, it would result in an additional annual expenditure of about United States Dollars 1.5 billion, placing significant pressure on the fuel sector and the national economy.

Speaking to The Daily Morning on an earlier occasion, Prof. Hemapala said that the Government planned to continue covering a portion of the fuel cost until 1 May, noting that any decision to extend the arrangement beyond that date would depend on developments in the Middle East and the IMF’s position on the matter. If the IMF approval is not granted, he said that the portion currently borne by the Government would have to be added to the fuel prices.