Fuel subsidy for buses out; fare hike in

Tuesday, 14 February 2012 00:54 - - {{hitsCtrl.values.hits}}

Contrary to Government assurance of minimal impact from the unprecedented fuel hike of Sunday, a set of upward price revisions including on bus fares and electricity will become reality from today.

Striking private bus operators yesterday won their demand with the Government agreeing to let fares up by 20% with minimum ticket priced at Rs. 9 and the much discussed fuel subsidy being abandoned.

The Public Utility Commission also decided yesterday to add a fuel adjustment surcharge on electricity bill.

These multiple moves, including the 37% hike in diesel prices and 9% of petrol cost, will cause the biggest impact on inflation in recent history.

Even before the Government agreed to hikes in bus fares and electricity charges, the Opposition on Sunday warned that the subsidy scheme for the private bus operators wasn’t practical.

The strike by private operators saw thousands of people stranded yesterday as the State-owned SLTB tried its best with its services.

An evening meeting between Transport and Finance Ministry officials with private bus operators saw a breakthrough. Though abandoning the subsidy for bus operators, the Government is expected to go ahead with the coupon scheme for Samurdhi families and fisher-folk using the fuel for electricity as a relief measure to offset the 50% hike on Sunday.

Ahead of the breakthrough on the bus crisis, the Government came in for stiff criticism from the Opposition yesterday. The two main opposition parties blamed the Government for making false promises to the people and termed the fuel subsidy just another gimmick of the Rajapaksa administration.

The United National Party accused the Government, claiming the fuel subsidy for the private transport services and fisheries sector was nothing but a hoax. The UNP’s former Deputy Leader Karu Jayasuriya warned of a massive burden to the people as Sunday’s increase made fuel prices in Sri Lanka Asia’s highest.

The JVP urged the convening of Parliament immediately to take up the issues that are taking place in the country following the recent fuel price increase.

Fishermen also had their own protest whilst the fuel hike sparked a degree of violence as well, with at least one incident where a private bus operator defying the strike was pelted with stones. Nearly 50 persons were arrested as well.

“There were attempts to disrupt the bus services by union members who attacked the operational buses and tried to beat up the drivers and helpers,” Police Spokesman Ajith Rohana told the Daily FT, adding that the Police were continuing to monitor the situation.

In addition, Sri Lanka’s fishermen held protests in five coastal towns to protest the fuel increase on the grounds that it increased their boat operational costs to unbearable levels.

Protests had been organised in several towns including Kalpitiya, Mahawera, Marawila and Negombo. They also warn that fish prices would increase as the extra Rs. 1,500 spent per boat would be added on to the catch they sold.

The Bakery Owners’ Association has already stated that prices of wheat-based products will be increased, signalling a further boost to the spiralling cost of living.