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Friday August 19th, 2022

Sri Lanka submits LP Gas price formula to court: Harsha

ECONOMYNEXT – Sri Lanka’s Attorney General has submitted a price formula for liquefied petroleum gas to court for approval to end ministerial discretion and bring back evidence based decision making, Economic Reforms and Public Distribution Minister Harsha de Silva said.

The price formula was developed by a newly set up analytics unit at the ministry.

Though called an open economy, Sri Lanka still controls prices of some goods.

In Sri Lanka prices usually go up and do not come down as the central bank prints money and depreciates the currency permanently, bringing economic hardship and political instability to the country, unlike high performing countries in East Asia.

"In my view all prices should be market determined," Minister de Silva said. "Why does the minister have to determine the price? But where there are price controls for whatever reason, we have to use evidence."

The price formula for LP Gas has been submitted to Supreme Court for approval.

Sri Lanka’s Supreme Court mandated a price formula for LP Gas following a court action several years ago but after the current administration came to power in 2015 along with a populist budget by then-Finance Minister Ravi Karunayake, the price formula was effectively abandoned.

Both the state-run Litro Gas and privately owned Laugfs making losses later when oil prices bounced and the central bank depreciated the currency after its domestic operations department printed money, de-stabilizing a pegged monetary system, critics have said.

The rupee fell from 153 to 182 to the US dollar in 2018. It bounced back to 176 to the US dollar in 2019 as credit weakened. But the domestic operations department had started injecting money in to the banking system again.

There have been calls to reform the central bank and criminalize certain reckless actions of the domestic operations department, including floating with excess liquidity. (Colombo/Aug16/2019)

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Sri Lanka schedules 3-hour power cuts for Aug 20, 21: regulator

ECONOMYNEXT – Sri Lanka will impose power cuts of up to three hours on Saturday August 20 and Sunday August 21, Public Utilities Commission (PUCSL) Chairman Janaka Ratnayake said.

All areas (A, B, C, D, E, F, G, H, I, J, K, L, P, Q, R, S, T, U, V and W) will have power cuts of 1 hours and 40 minutes between 10.30 am and 06.00 pm and 1 hour 20 minutes from 06.00pm to 10.00 pm.

Click here for a detailed schedule.

The state-run Ceylon Electricity Board (CEB) said supply interruption time and restoration time will vary within 30 minutes as indicated above.

Sri Lanka’s daily scheduled power cuts that were reduced to one hour in July with power generation from hydro power plants contributing more than 50 percent to the main grid reducing thermal power plant use was extended to three hours last week due to a breakdown at the Norochcholai coal power plant.

According to officials, the breakdown happened in Unit 1 of Norochcholai which will take around two weeks to repair.

The Minister of Power & Energy said Unit 2 is undergoing scheduled maintenance work while Unit 3 will continue to operate. West Coast and other fuel power pPlants will be used to manage the supply, the ministry said. (Colombo/Aug02/2022)

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Sri Lanka guidance peg edges T-bond yield edge down

ECONOMYNEXT – Sri Lanka Central Bank’s guidance peg for interbank transactions edged down on Friday (19), while yields in Treasury bonds picked up slightly and in T-bill remain unquoted in dull trade, a day after the Central Bank announced the policy rates will remain stable, dealers said.

A bond maturing on 01. 06. 2025 closed at 27.95/28.05 percent on Friday, slightly up from 27.90/28.00 percent on Thursday.

No T-bills were quoted on Friday, dealers said.

Meanwhile Sri Lanka’s central bank announced a guidance peg for interbank transactions further weakened by three cents to 361.00 rupees against the US dollar on Friday from 360.97 rupees.

Data showed that commercial banks offered dollars for telegraphic transfers between 368.00 and 370.00 for small transactions.  (Colombo/ Aug 19/2022)

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Sri Lanka records 10 new COVID-19 deaths in 48 hours as case numbers rise

ECONOMYNEXT –  Sri Lanka recorded 10 COVID-19 deaths in the 48 hours from August 17 to 19 taking the country’s pandemic death toll to 16,640, health ministry data showed.

Sri Lanka is experiencing a slight increase in COVID-19 cases with the relaxation of public health restrictions relating to face masks and public gatherings.

Health authorities said the situation will be monitored constantly and have asked the general public to continue to follow basic hygiene measures in order to control the spread of the virus again in the community.

In August alone 2,924 new cases were recorded in Sri Lanka, with 84 deaths attributed to the disease.

So far in 2022, from January onward, health authorities have identified 81,157 patients to date.

Epidemiology unit data showed that 874 patients are currently receiving treatment, out of which 716 are receiving home based care.

The spread of the virus has increased with the use of public transport rising after an easing of a fuel crisis.

Sri Lanka is also facing difficulties in securing essential medicine supplies for the health sector due to a forex shortage.

Health officials said if the number of COVID-19 patients rise to a level the health sector cannot manage,  with the added issues of fuel and medical shortages, the health system might collapse.

“It is the responsibility of us all. There is no use trying to forcibly control people. We all have the responsibility to reduce or stop the spread of the virus before it gets out of control. We have been living with it for the past two years,” Deputy Director General of Health Services Dr Hemantha Herath said. (Colombo/Aug19/2022)

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