Benefits of global oil price reduction should be passed on to the people: Mangala

Finance and Media Minister Mangala Samaraweera

As a result of the price formula introduced by the Government, the price of petrol and diesel have been reduced by Rs. 30 and Rs. 20 per litre respectively when compared with the last price increase on 10 October.

Therefore, the Government stresses that the bus fares and the charges in the transport sectors such as three-wheelers and school vehicles should be reduced proportionately in order to pass the benefits of the global fuel price reduction to the people. 

Accordingly, the Government expects the regulatory institutions which are responsible for the transport sector would take necessary action to ensure that the benefits of the fuel price reduction passed on to the passengers. 

At the same time, fisheries and other transport sectors should also pass on the benefit of fuel price reduction to the people as the production and transport costs of such sectors have declined following the decrease of diesel price. This would create a tendency of reducing the prices of goods and services thereby helping to cut the cost of living effectively.

When Finance and Media Minister Mangala Samaraweera presented the Vote on Account for the first four months of the year 2019 on Friday in the Parliament, Prime Minister Ranil Wickremesinghe announced that the fuel price would be reduced effective midnight on Friday.

Accordingly, the fuel prices which were revised based on the fuel pricing formula – a litre of Octane 92 patrol has been reduced by Rs. 10 to Rs. 125 from Rs. 135 while a litre of Octane 95 has been reduced by Rs. 10 to Rs. 149 from Rs. 159. A litre of auto diesel has been reduced by Rs. 5 to Rs. 101 from Rs. 106 while a litre of super diesel has been reduced by Rs. 10 to Rs. 121 from Rs. 131.   

The Cabinet had approved in May the introduction of a fuel price formula to decide the fuel prices in the local market based on the price fluctuation of crude oil in the Singapore market. Since then, the Treasury followed that fuel price formula and reviewed the global fuel price fluctuation on the 10th of each month. The Treasury used the then prevailing price of a barrel of crude oil in the Singapore market in this practice. 

The global prices of crude oil were continuously on the rise in the recent past and consequently the fuel prices in Sri Lanka too increased until 10 October. The fuel price in Sri Lanka was increased for the last time on 10 October and at that time the global price of a barrel of crude oil was reported as $ 85. 

However, global price of crude oil was continuously reduced from November and the average global price of crude oil is currently reported as $ 58 per barrel. Accordingly, the price of a litre of Octane 92 that prevailed as Rs. 155 on 10 October has been reduced by Rs. 30 to Rs. 125 while a litre of Octane 95 that has been reduced by Rs. 20 to Rs. 149 from Rs. 169.

In addition, the price of a litre of auto diesel that prevailed as Rs. 123 on 10 October has been reduced by Rs. 22 to Rs. 101 while a litre of super diesel has been reduced by Rs. 20 to Rs. 121 from Rs. 141 by today.