ECONOMYNEXT – Sri Lanka’s petroleum sector which is on track to be liberalised following a change to the sector law should be regulated by the Public Utilities Commission of Sri Lanka (PUCSL) and not a committee under the minister, legislators said.
“There will be no independent regulation if the sector is overseen by a committee under the Minister,” opposition legislator Kabir Hashim told parliament during a debate on the new legislation, which was passed.
The PUCSL which has some shadow regulatory power over petroleum, however, had no powers to issue licenses for petroleum players.
A plan to set up a committee under a minister will not solve the problem or inspire confidence in foreign investors, the one-time petroleum minister Hashim of the opposition Samagi Jana Balawegaya (SJB) said.
Anura Priyadarshana Yapa, a former petroleum minister who was elected on the ruling Sri Lanka Podujana Peramuna (SLPP) ticket said the involvement of the Finance Ministry in regulating petroleum has been counterproductive in the past.
The Finance Ministry had powers to set prices of petroleum in the past, and most of the time prices were kept down.
“It is not fair to blame the CPC or its workers for losses. The orders to keep down prices come from the top,” said Yapa.
“If the Finance Ministry is involved there will be interference.”
However, the PUCSL had also failed to raise prices of electricity since 2013, raising questions about its usefulness.
The regulator quickly cut prices as a coal plant came on stream following shortly after the last price increase but had since failed to hike rates as economists printed money and progressively destroyed the rupee from 113 to 200 to the US dollars.
Prices were raised only after soft-pegging economists destroyed the rupee from 200 to 360 to the US dollar. (Colombo/Oct24/2022)