An Echelon Media Company
Wednesday December 6th, 2023

Sri Lanka to fix fuel prices, build energy stability fund amid COVID-19 crude collapse

ECONOMYNEXT – Sri Lanka will keep oil prices fixed and build a 200 billion rupee fuel price stability fund, Minister Bandula Gunewardane said as global prices collapsed amid a Coronavirus pandemic.

Taxes will be levied on fuel to take out cash from oil distributors and build a fund, which will be used to repay debt of the Ceylon Petroleum Corporation and Ceylon Electricity Board.

The government is planning to keep fuel prices fixed for the next 12 months, he said.

Brent Crude has fallen below 35 dollar a barrel amid a global Coronavirus pandemic.

Sri Lanka’s new administration halted a price formula after coming to office in November 2019.

Minister Gunewardene said in 2018, though there was a price formula the Ceylon Petroleum Corporation had run a loss of over 100 billion rupees.

Most of the losses however had come from a foreign exchange loss, where the CPC had borrowed or had been forced to borrow dollars to run an unhedged open position.

Similar unhedged dollar positions have been run before, including with credit from Iran.

Economic analysts believe that such actions are done due to lack of knowledge of classic economic theory and a strong belief in Mercantilism.


Nick Leeson-style losses at Sri Lanka’s CPC raise big questions: Bellwether

Many in Sri Lanka believe that oil gold or cars imports (trade), have something to do with currency depreciation and balance of payments trouble (monetary instability) rather than liquidity injections of the central bank (money and credit).

Over the last few weeks tens of billions of rupees of excess liquidity has been injected to the banking system though outright central bank credit, a reserve ratio cut and a seniorage profit transfer from the monetary authority. (Colombo/Mar19/2020)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka rupee closes stronger at 327.40/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 327.40/90 to the US dollar on Tuesday, from 328.10/30 the previous day, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.60/70 percent from 13.70/14.00 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.00 percent from 13.90/14.10 percent.

A bond maturing on 15.01.2027 closed at 14.00/15 percent from 14.00/14.10 percent.

A bond maturing on 01.07.2028 closed at 14.10/20 percent from 14.20/35 percent.

A bond maturing on 15.05.2030 closed at 14.20/35 percent, from 14.25/45 percent.

A bond maturing on 01.07.2032 closed at 14.10/35 percent, from 14.05/40 percent. (Colombo/Dec5/2023)

Continue Reading

Sri Lanka stocks close down as investor sentiment dips

ECONOMYNEXT – The Colombo Stock Exchange closed down on Tuesday, CSE data showed.

The All Share Price Index was down 0.40 percent, or 43.50 points, at 10,700.09.

The S&P SL20 index was up 0.43 percent, or 13.32 points, at 3,054.41.

Turnover was at 711 million. The capital goods sector contributed 172 million, the food, beverage and tobacco sector contributed 140 million, and banks 113 million of this.

Top positive contributors to the ASPI in the day were John Keells Holdings Plc (up at 193.00), Richard Pieris And Company Plc (up at 19.80), and Nation Lanka Finance Plc, (up at 0.40).

Negative contributors were Commercial Bank of Ceylon Plc (down at 89.70), Sampath Bank Plc (down at 71.00), and Central Finance Company Plc, (down at 106.00). (Colombo/Dec5/2023).

Continue Reading

Sri Lanka plans to reduce number of school grades from 13 to 12

ECONOMYNEXT – The Ministry of Education proposes to reduce the number of school grades from 13 to 12, according to a government information department statement.

“Every child will be given the opportunity to finish school in 17 years through the proposed new education reforms,” education officials were quoted as saying after a discussion on budget allocations.

Under the proposed system, pre-school education will be at the age of 4 years, the primary section between grades 1-5, junior section between grades 6-8, and senior section between grades 9-12.

The General Certificate of Education Ordinary Level Exam (GCE O/L) is proposed to be conducted in grade 10, and the Advanced Level Examination in grade 12.

It has also been decided to reduce the number of mandatory subjects at the GCE O/L Exam from 9 to 7.

Three new subjects, information and communication technology (ICT), technical and professional skills, and religion and values will be made mandatory and included in those 7 subjects. (Colombo/Dec5/2023)

Continue Reading