(Former Parliamentarian Sunil Handunneththi participated in a media briefing held at the JVP head office yesterday (12th) with the General Secretary of the JVP Tilvin Silva. Here are extracts from a speech he made.)
We all know that the price of oil has been increased since midnight yesterday (11). As a result of this decision, the country’s entire population will be severely affected in addition to the corona epidemic. Instead of giving relief to the people, the people have been dragged to the streets. With this decision, the prices of consumer goods will go up drastically. The Petroleum Corporation states that oil prices were increased to cover its losses. However, the people were not given the concession every time the oil price fell in the world market, and the loss of the CPC too has not been covered.
The extra profit has been taken to the treasury. When the price of a barrel of oil dropped to around US $ 40 in the recent past, it was said that a fund would be set up to provide relief in the event of an increase in oil prices in the future. According to the Central Bank report, the government will set up a fuel price stabilization fund with the aim of raising $ 200 billion in six months, benefiting from significantly lower oil prices in the market. The Fuel Price Stabilization Fund was set up when prices fell. Now, what has happened to that fund?
Today the government does not say a word about that fund. However, the 2020 Central Bank report reveals more information. “Despite the relatively low global oil prices, the financial performance of the Ceylon Petroleum Corporation (CPC) grew in 2020 due to the unchanged domestic prices of major petroleum products. According to unaudited provisional financial estimates, the Ceylon Petroleum Corporation (CPC) last year lost Rs. 19.1 billion. In 2020 an operating profit of Rs. 33.9 billion has been recorded. If there was an operating profit of Rs. 33.9 billion a few months ago when the people were suffering. On the other hand, if a fund of Rs.20.0000 million was formed, people should be given the promised relief. However, the government has made it impossible for the people to take to the streets as it makes use of the corona epidemic. We should all unite and protest as a whole country.
With this price increase, India’s IOC has been given special privileges. The octane 92 has been increased to Rs. 157 a litre. The landing cost is Rs.97.70. 10.60 is the processing cost. The financial cost is Rs. 1.84, and the administrative expense is one rupee. Also, a tax of Rs. 39.33 is added. The total cost is estimated at Rs. 150.54. This is how the new price of Rs 157 is determined. For every litre of petrol the Petroleum Corporation makes a profit of 6.44. IOC also gets this profit. In addition, a sum of Rs. 10.60 is added as a profit for IOC. This is the processing cost that the CPC has to bear, but the IOC does not have to. It adds up as a profit for IOC. Here we have considered octane 92 petrol only. The CPC buys by issuing letters of credit. It costs extra money. The Corporation also collects additional funds for bank loans. The Petroleum Corporation has to bear several additional expenses like this, which the IOC does not have to bear. Thus, only by increasing the price, the IOC makes an additional profit of 12.84 per litre of petrol. According to these price adjustments, the IOC will get twice as much profit as the Petroleum Corporation. When the people need relief, the CPC gets a profit, and the IOC has been allowed to make a bigger profit. This is clearly creating serious crises for the people of our country. When the oil price in the world market was falling, fuel price did not come down in our country. Why cannot the money that was collected without giving that relief to the people be used today? What has happened to the Rs. 20,0000 million fund that was collected without reducing fuel prices? Why can’t it be used to stabilize prices today? On the one hand, billions of rupees of public money are being spent on importing luxury vehicles for MPs. The privileges of Ministers and Members of Parliament have not been reduced by even five cents. All these are being recovered from the people and they are planning to sell CPC, saying it is being maintained at a loss. As a country, we must unite immediately to defeat the idiotic process being followed by the government. We demand the government to immediately give the people relief using the funds collected when fuel prices fell in the world market. The process to please IOC within this process should be stopped immediately. We urge the government to act responsibly without imposing the burden of oil prices on the people.
