Consumer Affairs Authority to be strengthened following fuel hike
Sri Lanka’s consumer interest is to be protected by further strengthening the Consumer Affairs Authority (CAA) Act aimed at passing the benefit of fuel price fluctuations in accordance with the cost-reflective transparent fuel pricing formula which will determine the fuel price on the 10th of every month.
Finance Minister Mangala Samaraweera told a media conference in Colombo on Friday that the price of fuel will go up and down according to the fluctuations of the crude oil price and the dollar.
These two factors and several other factors will be taken up for consideration when determining the price of fuel using the pricing formula.
The prices of fuel should be changed as and when the crude oil price goes up or down, he said adding that the suggestion was to change the prices every week.
But due to technical issues faced by the Ceylon Petroleum Corporation a cabinet decision has been taken to revise the fuel price monthly, he revealed.
When the fuel price is reduced under the pricing formula, the prices of consumer items should also come down by traders as the transport cost is one of the factors which determine the price of goods, he added.
But it is not happening in the local market and the government is considering to give more teeth to the CAA to crack down on such errant traders, he said.
Minister Samaraweera noted that he has requested Minister of Industry and Commerce Rishad Bathiudeen to take necessary action to strengthen the CAA Act safeguarding the rights of not only the consumers but also the traders who are subjected to injustice. Both the goods and services are covered within the ambit of the Act.
He noted that the Finance Ministry is also considering the possibility of making some changes in the Inland Revenue Act to ease the economic burden of the people.
This decision has been taken as there were some issues in the implementation of certain sections of the Act which bring some economic hardships, he said.
In this fuel pricing formula, prices would change with international market prices similar to many other commodities that people consume, he said.
He noted that everyone who increases prices of goods and services needs to be prepared to reduce prices when the oil prices drop.
There was also a strong case to gradually introduce corrective taxes to both petrol and diesel to account for externalities, this can be done with increments of Rs. 0.5 a litre per month so that the consumer will not feel the effect of these revisions, he pointed out.
The government has introduced this fuel pricing formula in accordance with a prior commitment made to the IMF.