Economy

Sri Lanka finds way around CPC monopoly to end aviation fuel crunch: Minister

Tuesday June 7, 2022 12:41 pm

ECONOMYNEXT – Sri Lanka is in discussions with suppliers to allow them to bring aviation fuel, stock them in state-run Ceylon Petroleum Corporation’s facilities and pay them later from the revenue earned from sales, Energy Minister Kanchana Wijesekera said.

Sri Lanka is short of aviation fuel due to the inability of the CPC to find foreign exchange to pay suppliers, who are demanding pre-payment as the state-run firm has a monopoly on aviation fuel.

SriLankan Airlines and Airport and Aviation Services and some other companies had asked for permission to import and sell aviation fuel, but the legal monopoly is with the CPC.

Therefor an attempt is being made to make supplies available based on the ‘existing legal framework’.

“There are 7 proposals to supply aviation fuel,” Minister Wijesekera said. “We hope to enter into an agreement where the CPC or the government does not make any payment to the supplier.

“The supplier will bring the fuel and store it at our facilities and tanks.

“The CPC will sell the fuel and pay them. At the moment there are six such proposals.

“We will chose the best proposal and enter into an agreement for a year.

“We have got cabinet approval for that activity.”

State-run Sri Lankan Airlines is stocking up for long haul flights from India due to the CPC monopoly.

Foreign airlines are ‘tankering’ or bringing extra fuel to Colombo for the return journey due to the CPC monopoly. (Colombo/June07/20220

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Logistics

Sri Lanka India industrial zone around Trinco, maritime links mooted

Sunday September 24, 2023 4:23 pm

ECONOMYNEXT – Sri Lanka’s Ports Minister Nimal Siripala de Silva had highlighted the desire of both the Governments to work closely to develop the industrial zone at Trincomalee, after accepting an invitation to participate in a maritime summit.

The Global Maritime India Summit (GMIS) will be held in India from October 17-19, 2023 at Mumbai where Sri Lanka has been invited at a partner country.

At a curtain raiser event on September 22, India’s High Commissioner in Colombo, Gopal Baglay had said both countries were working on enhancing sea connectivity according to a vision document launched during a recent visit of the President of Sri Lanka to India.

Minister de Silva will lead a delegation from Sri Lanka to the summit.

Secretary to the Ministry of Ports, Shipping and Waterways, Government of India, T K Ramachandran said the Global Maritime India Summit aims strengthen the Indian maritime economy by promoting global and regional partnerships and facilitating investments.

The event will give an opportunity to the Government of Sri Lanka to attracting greater investment from India in development of its maritime infrastructure, Ramachandran said.

It will also facilitate greater business to business interactions. (Colombo/Sept24/2023)

Economy

Sri Lanka brings back import para tariff on milk

Sunday September 24, 2023 8:49 am

ECONOMYNEXT – Sri Lanka has brought back an import para tariff called the Ports and Airports Levy, to several grades of milk powder.

Milk powder has been removed from a list of PAL exemptions, making them liable for a 10 percent tax.

The PAL para tariffs are also a contentious issue in terms of export competitiveness, and the government has previously given undertakings that they will be eliminated.

Trade freedoms of the poor figure in an IMF/World bank reform program with the governments.

Milk is a protein rich food, in a country where children of poor families are facing stunting and malnutrition.

Economic nationalism is seen at high levels in food, with several businessmen are pushing for trade protection, amid an overall autarkist (self-sufficiency) ideology, going directly against policies followed in East Asia, which the same as hold up as examples.

Sri Lanka keeps dairy product prices up ostensibly to bring profits to a domestic dairy company and farmers.

Sri Lanka also keeps maize prices up, ostensibly to give profits to farmers and collectors. (Colombo/Sept22/2023)

Economy

Sri Lanka govt warns liquor manufacturers: pay defaulted tax or lose licence

Sunday September 24, 2023 8:33 am

ECONOMYNEXT – Sri Lanka government which is struggling to raise the state revenue despite higher taxes, has warned liquor manufacturers to pay defaulted taxes or lose their licence.

The government is now getting tough with past tax defaulters amid concerns over falling short of this year’s revenue target agreed with the International Monetary Fun (IMF).

“Liquor manufacturing firms owe us 660 crore rupees (6.6 billion rupees),” Siyambalapitiya told reporters on Thursday (21).

“Most of this or around a third is the only excise tax amount to be paid. The rest is penalty. If a liquor manufacturer does not pay on time, we impose a penalty of 3 percent per month This means 36 percent (penalty) per annum,” he said.

“We have given them deadline to repay the basic excise taxes. If they don’t pay, we will cancel their licence.”

President Ranil Wickremesinghe’s government committed an ambitious revenue target among many other reforms to the International Monetary Fund (IMF) in return to a $3 billion loan package.

However, the revenue could face a short fall of 100 billion rupees, State Finance Minister Ranjith Siyambalapitiya has said.

A new Central Bank Act also has legally prevented the government of printing money at its discretion as in the past. (Colombo/September 24/2023)