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Mangala’s oil pricing formula does not hold water, say critics
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The Government’s decision to make its fuel pricing formula public this week has failed to avert criticism over its authenticity amid questions over why it was not made public earlier. Finance Minister Mangala Samaraweera, who had earlier told the media that even he could not fully comprehend the fuel pricing formula, showed the media what he now claimed was a fairly straightforward equation on Thursday (18). The formula had been used to calculate the price of fuel since it was introduced in May.
According to the formula the Maximum Retail Price (MRP) of fuel is calculated by taking into account the cost incurred in Singaporean Platt’s price when purchasing a barrel of oil and the exchange rate of the rupee, the procession cost, administrative expenses and taxes.
The Joint Opposition (JO) was quick to dismiss the formula as yet another attempt to deceive the people, pointing out that the Finance Ministry had failed to release it even under the Right to Information (RTI) Act. JO Parliamentarian D.V. Chanaka claimed that the truth about the formula was that the taxes exceeded all the other costs taken together.
Even former Finance Minister Ravi Karunanayake claimed he could not understand the formula. Mr Karunanayake said one did not need a special formula for fuel pricing and what was needed was to balance importation costs with selling price and how to narrow the balance.