Bandula's economics - letter

Minister Bandula Gunawardena's press conferences have become the joke of the day. He says that petrol in the UK is Rs 232 a litre and is only Rs120 per litre in Sri Lanka. Is he not aware that the per capita income in the UK is US$30,000 while it is US$1,200 here? Hence if petrol sells at Rs 232 in the UK the equivalent price should be Rs 9 in Sri Lanka. If petrol sells at Rs 120 in Sri Lanka then the UK price should be Rs 3000 per litre. Does he actually believe that petrol is cheaper in Sri Lanka than in the UK or is he simply trying to fool the masses? If it is the former then God save us from these economics intellectuals.

He finds fault with the UNP government in which he held a very responsible post for including a clause in the Consumer Affairs Act where Prima can raise prices of flour. Was he not aware of this clause when he was in the Cabinet? Does he not study Cabinet papers? Where in the world can one prevent a party from raising prices when world market prices go up? Isn't this what is happening to oil? He justifies the local fuel price hikes by saying that the world prices have gone up. Fair enough although he does not mention that the price of a litre of petrol includes Rs 58 in taxes.

Then shouldn't the price of flour also go up? What convoluted logic is this when he justifies increases in the price of one commodity and challenges the price increase of another? It is high time he realises that his audience includes educated people who may not have his qualifications in economics but are qualified in other fields and have more common sense and practical experience in commerce and industry. You cannot run a modern economy in the 21st century by referring to text books.

C. Ramachandra
Colombo 7.