PMD attributes rising crude oil prices as main reason for fuel price hike

Addressing the recent fuel price hike, the President’s Media Division (PMD) issued a statement today (13) which cited the continuous rise in world crude oil prices over the past few months as one of the main reasons for the increase in fuel prices.

“At present, the price of a barrel of crude oil is over US $ 70, and market trends indicate that it will continue to rise,” the PMD said.

According to the statement, the Cost of Living Committee chaired by His Excellency the President, with the participation of the Hon. Prime Minister and the Ministers in charge of the subject, focused on a number of key reasons for the increase in fuel prices.

In addition to the foreign exchange expenditure involved with purchasing oil, the PMD also stated that the Ceylon Petroleum Corporation (CPC) has been a loss-making institution, relying on loans from Bank of Ceylon and People’s Bank every year. 

It was also highlighted that fuel consumption for private and public transport should be reduced by about 60 percent. Therefore, ELECTRIC vehicles as well as trains should be converted to electric services as much as possible. Transport costs can also be stabilized by stopping the import of fuel-powered vehicles altogether and promoting the use of ELECTRIC vehicles and providing ELECTRIC engines for three-wheelers.

Together with the increase in oil prices, the government has taken steps to implement a number of proposals to change the pattern of consumption that is dependent on imported fuels.

“The government is also accelerating the generation of renewable energy to prevent the Ceylon Electricity Board (CEB) from generating about 30 percent of its fuel on average. Therefore, by providing solar thermal power kits to every household, school, hospital and government building, not only can the pressure on the high cost to the people be reduced, but the supply of those units to the CEB can also generate revenue,” the PMD said.

In conclusion, the PMD iterated that the price increases are just one key factor in a common program to strengthen the local economy and that it will also strengthen the country’s banking system, maintain low interest rates, reduce foreign exchange spending, strengthen the exchange rate, secure the health and well-being of the people, and transform the import-dependent consumer economy into an investment and consumption economy based on domestic production.