Benefits of oil price reduction must be passed to the public

The government has urged transport regulatory institutions to take necessary action immediately in order to pass the benefits of the recent oil price reduction to the people. 

This request was made by Finance Minister Mangala Samaraweera when he addressed parliament last week.

As a result of the price formula introduced by the Government, the price of petrol and diesel has been reduced by Rs.30 and Rs.20 per litre respectively when compared with the last price increase on 10th of October 2018.

Therefore, the Government noted that the bus fares and the charges in the transport sectors such as, three wheelers and school vehicles should be reduced proportionately in order to pass the benefits of the global fuel price reduction to the people. 

The Private Bus Owners Association had agreed to reduce bus fair by 4.2 percent but many observers noted that this was not a fair reduction as the government had decreased the fuel prices substantially over the last month and a half.

Accordingly, the Government expects the regulatory institutions which are responsible for the transport sector would take necessary action to ensure that the benefits of the fuel price reduction are passed on to the passengers.
 
At the same time, fisheries and other transport sectors should also pass on the benefit of fuel price reduction to the people as the production and transport costs of such sectors have declined following the decrease of diesel price. This would create a tendency of reducing the prices of goods and services thereby helping to cut the cost of living effectively.

The global prices of crude oil were continuously on the rise in the recent past and consequently the fuel prices in Sri Lanka too increased until October 10th. The fuel price in Sri Lanka was increased for the last time on October 10th and at the that time the global price of a barrel of crude oil was reported as US$85.

However, global price of crude oil was continuously reduced from the month of November 2018 and the average global price of crude oil is currently reported as US$58 per barrel.