Fuel, power hikes on hold for now

By Malik Gunatilleke

The recently proposed fuel and electricity hikes have been placed on hold, while the Treasury is requested to submit a comprehensive report on the effects these hikes would have on other sectors. The special committee appointed by the Cabinet to look into matters concerning fuel and electricity pricing discussed at its inaugural meeting last Monday, various issues surrounding the proposed hikes by the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB).

The Ministerial committee headed by Prime Minister Ratnasiri Wickremanayake and comprising Petroleum and Petroleum Resources Minister A.H.M. Fowzie, Power and Energy Minister John Seneviratne and Trade and Consumer Affairs Minister Bandula Gunawardena decided to temporarily halt the fuel hike to control the cost of living.

Minister Seneviratne said the committee requested the Treasury to submit a full report on the effects of further fuel hikes on other sectors. “After the Treasury submits its report the committee will decide whether the fuel hike should be approved or whether other courses of action should be taken,” he said.

He said this matter would be taken up again at the committee’s next meeting on June 25. Meanwhile, various media reports quoting Minister Fowzie on a proposed fuel rationing system was reported to be the main topic of the discussions.However, Minister Fowzie told The Sunday Times there was no such proposal and that the media reports were false.

“The CPC had previously proposed a fuel hike due to increasing world market prices. Whether approval should be given for the fuel hike was the main topic of discussion. There was no talk about any fuel rationing,” he said. The committee had also decided that the CEB would not be allowed to increase electricity tariffs until the end of the year.

This decision came amidst a CEB proposal which was being reviewed by the Consumer Affairs Authority (CAA), for a 35% electricity hike, due to rising diesel costs. However CEB General Manager D.R. Pulleperuma said such a proposal for a tariff increase was not put forward.