More shocks in the pipeline

Saturday 21st March, 2026

Trouble is said to come in threes. For Sri Lankans, it seems to come in multiples of three. Close on the heels of crippling fuel price hikes, speculation is rife that electricity tariff increases are on the cards. The government is said to be contemplating another round of fuel price hikes as well.

The JVP/NPP talked the talk in the run-up to the 2024 elections, but it is now unable to walk the walk. In fact, the sobering economic reality has compelled it to do the very antithesis of what it promised during its Opposition days. It made a solemn pledge to bring down the cost of living immediately after forming a government and even tackle the country’s debt crisis expeditiously, without aggravating the people’s lot. There seems to be no end in sight to its about-turns, which are legion.

There is reason to believe that many people voted for the JVP/NPP, expecting it to fulfil its promise to lower taxes and tariffs among other things. Now that the government has reneged on that pledge and increased taxes and electricity and fuel prices substantially, they must be feeling that they were taken for a ride. Winning elections by making all the promises in the world is one thing, but fulfilling them to live up to the people’s expectations is quite another. There was no way the NPP government could slash taxes and tariffs, given the perilous state of the economy and the IMF bailout conditions, which are aimed at increasing state revenue severalfold and bring about debt sustainability. President Gotabaya Rajapaksa’s government blundered by slashing taxes and fuel prices. Interim President Ranil Wickremesinghe had to rectify those colossal policy blunders that ruined the economy. However, the public naturally becomes livid when governments do not make good on their promises and they are left without the promised relief and benefits.

The Opposition has said President Anura Kumara Dissanayake yesterday made a case for another round of fuel price hikes while addressing Parliament. A spokesman for fuel distributors has gone on record as saying that more fuel prices are in the pipeline. Such statements only cause panic among consumers and drive filling stations operators to hide their stocks with a view to profiteering. Yesterday, many of them claimed they had run out of fuel. There is no one the public can turn to. Unsurprisingly, when many filling stations claim to have no fuel, queues of vehicles near the others where stocks are available grow longer. It behoves the President, other government politicians and fuel distributors to refrain from predicting fuel prices hikes. It is also a mistake for them to predict price reductions, for the filling station owners do not place orders until the fuel prices are lowered. What the politicians and others should do is to guard their tongues and allow fuel prices to be lowered or increased.

Further fuel price increases will make the cost of living even more unbearable for the ordinary people. The government, which came to power, promising to do away with the taxes on fuel and halve the petroleum prices, ought to consider lowering the loss-recovery levy on fuel, amounting to Rs. 50 a litre, until the global oil market stabilises with prices returning to the pre-Middle East conflict levels. Thereafter, that levy may be re-imposed but in the form of a special commodity tax so that the Indian Oil Company, Sinopec, etc., which are said to control 43% of the local fuel market, will have to pay it, and the Treasury will gain. At present, the loss-recovery levy helps increase the profits of the private companies, ironic as it may sound.

It is hoped that government politicians and their officials will talk less and work more to increase the country’s oil storage capacity. The need to increase oil buffer stocks as a national priority cannot be overstated. Allowing the government’s private sector cronies to import oil cannot be considered a solution to the current energy crisis.

from The Island https://ift.tt/6jqInhx