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Friday March 31st, 2023

Sri Lanka hikes petrol to Rs177, diesel Rs121 a litre

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation has hiked petrol by 20 rupees to 177 rupees a litre and auto diesel by 10 rupees to 121 rupees, as money printing depreciated the rupee and global commodity prices also went up due to Federal Reserve loose policy.

Petrol 95 Octane was raised up by 23 rupees to 203 rupees a litre.

Super diesel was raised by 15 rupees a litre to 159 rupees.

Kerosene has been raised by 10 rupees to 87 rupees a litre.

Subsidized kerosene is used by some factories to run furnaces and buses also mix them with diesel to keep costs down.

By end 2014 Sri Lanka had closed part of the gaps between the three fuels, but from 2015 under then Finance Minister Ravi Karunayake the gaps worsened again.

The late Finance Minister Mangala Samaraweera brought back formula based pricing, but in 2018 the central bank printed money creating a currency crisis, making the CPC borrow dollars

The central bank had earlier asked the Treasury to raise fuel prices.

Raising fuel prices reduces the disposable incomes of customers both businesses and individual and reduces non-oil imports keeping external and domestic sectors in balance protecting the exchange rate – in the absence of money printing.

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Sri Lanka has faced higher global and domestic and currency pressure amid record money printing from around February 2020.

The money was printed by the then leadership of the central bank and its advisors to ‘create a production’ economy.

At the time the central bank claimed there was ‘no demand driven inflation’ ignoring warnings by the public, media and classical economists.

Global commodity prices have also been going up amid record US money printing. Fed Chief Jerome Powell claimed that inflation was ‘transient’. As money printing fired an aggregate demand bubble creating shortages in some sectors, they were blamed on ‘supply chain.’

Sri Lanka usually blames inflation on imported inflation and raising administered prices. However when administered prices are kept down keeping the index down rates are kept low, and money is printed saying inflation is low and there is no need to hike rates. (Colombo/Dec22/2021)

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Sri Lanka tax hike: no response from president, professionals to discuss next steps

GMOA Secretary Haritha Alutghe

ECONOMYNEXT – Sri Lanka’s trade unions and professional associations who have been agitating against an International Monetary Fund (IMF) backed progressive tax hike will meet to discuss further union action after a letter to the president went unanswered.

Government Medical Officers’ Association (GMOA) secretary Dr Haritha Aluthge told reporters on Friday March 31 that the unions will meet as the self-styled Professionals’ Trade Union Alliance (PTUA) collective which have so far been organising strikes and demonstrations demanding a revision of the taxes.

The PTUA has been awaiting a promised meeting with President Ranil Wickremesinghe for some days now. Aluthge previously said on Monday that if the meeting did not materialise, the unions would be compelled to go on strike.

The issue has become stagnant due to government inaction, said Aluthge at Friday’s press conference.

“The PTUA informed the president in writing yesterday for the last time to please understand the gravity of this situation and to immediately give us a meeting and present the government’s interim solution, through which the government can take measures to ease the sense of tension among professionals,” he said.

The purpose of the meeting is to discuss an “interim solution” to the professionals’ grievances over the progressive income tax hike until a reported revision that’s due in six months when the country’s recently approved 17th IMF programme comes up for review.

“Sadly, there has still been no response,” the GMOA official said.

All unions and professional associations will meet Friday evening together with a number of other unions to discuss further action, he added.

The privately-owned English-language weekly newspaper The Sunday Times reported on March 26 that the IMF had indicated the possibility of revising some of the taxes imposed as part of the IMF’s staff-level agreement with Sri Lanka when the programme comes up for review in six months.

According to the newspaper, IMF officials had conveyed this to representatives of trade unions during a virtual roundtable held last Friday March 24. The virtual meeting was held on the initiative of the IMF and was attended by trade unions and professional associations representing the PTUA including the GMOA. (Colombo/Mar31/2023)

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Sri Lankan transport associations cut haulage and transportation fees after fuel price cut

ECONOMYNEXT –  Sri Lanka Association of Container Transporters and fuel bowser owners has decided to reduce the haulage charges and transportation fee, after the government cut the auto diesel prices by 80 rupees, association officials said.

“Due to the recent reduction in Auto Diesel price from March30, 2023, the committee has decided to reduce haulage charges by 7 percent,” association said.

Sri Lanka Private Petroleum Tanker owners has also decided to reduce the transportation fee of fuel by 8 -10 percent from April onwards.

“We will be meeting with the association members and will be deciding on exactly how much we will be reducing,” the General Secretary of the association Nimal Amarasekera told EconomyNext.

“We hope to reduce it by 8-10 percent and will be applied.”

Meanwhile United Lanka Fuel Transport Bowser Owners Association said, the price reduction will be done, and the specific amount will be calculated using the cost per kilometer for a transporting bowser.

“We have different types of bowsers such as 13,200 litre and 19,800 litre likewise,” Association President K.W. Charles told EconomyNext.

“So the cost per kilometer per bowser is different and after we calculate only we can give a specific percentage.

“It will come to effect from this month and the payments for the next month will be based on the new prices.”

Charles said, this is only based on the price reduction of fuel, however several costs as maintenance and spare part costs should also be considered when deciding the transportation cost, which is also being discussed with the Ceylon Petroleum Corporation.

Sri Lanka slashed fuel prices with effect from Wednesday (29) midnight, Power and Energy Minister Kanchana Wijesekera said, after a protest by trade unions of state-run fuel retailer Ceylon Petroleum Corporation (CPC) resulting in queues at filling stations due to supply disruption.

The price of Petrol 92 Octane will be slashed by 15 percent or 60 rupees to 340, Petrol 95 Octane 95 will be reduced by 26.5 percent or 135 rupees to 375, Auto Diesel by 19.8 percent or 80 rupees to 325, and kerosene by 3.3 percent or 10 rupees to 295. (Colombo/ March31/2023)

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Sri Lanka’s shares edge up in mid day trade

Stock Market. Free public domain CC0 image.

ECONOMYNEXT – Sri Lanka’s shares edged up in mid day trade on Friday, Colombo Stock Exchange (CSE) data showed.

All Share Price Index was up 1.09 percent or 100.69 points to 9,329.19, while the most liquid index was up 1.23 percent or 32.86 points to 2,697.12.

The market generated a turnover of 895 million rupees.

Top gainers during mid day trade were Commercial Bank, Hatton National Bank and Expolanka. (Colombo/Mar31/2023)

 

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