The Committee on Public Finance (COPF) has stressed the importance of directing fuel subsidies specifically to those genuinely in need and to the public transport sector, rather than providing them uniformly to every consumer. This was discussed when the committee met in Parliament under the chairmanship of Member of Parliament Dr. Harsha de Silva.

The meeting was attended by Deputy Minister Chathuranga Abeysinghe, as well as Members of Parliament Ravi Karunanayake, Harshana Rajakaruna, Shanakiyan Rasamanickam, M. K. M. Aslam, Nimal Palihena, Wijesiri Basnayake, Thilina Samarakoon, Ajith Agalakada, and Sunil Rajapaksha.

Key Points

  • Proposal made to target fuel subsidies only at the most vulnerable citizens and public transport.
  • Concerns raised over new tyre import standards and the inadequacy of the three-month transition period.
  • Discussions held regarding diesel subsidies and supplementary allowances for Aswesuma beneficiaries.

Fuel price formula and market distortions

Attention was drawn to providing a diesel subsidy and an additional allowance to Aswesuma beneficiaries under the relief program for those impacted by the Middle East conflict. It was pointed out that cost and competitive imbalances exist because the Ceylon Petroleum Corporation (CPC) produces a portion of fuel through its refinery, while private companies rely entirely on imports.

The committee observed that despite differences in landing costs between foreign companies and the CPC, private firms are compelled to set prices based on the rates announced by the CPC. The necessity for an independent regulator was also highlighted during the discussion.

Tyre standards and Aswesuma revisions

Officials were questioned regarding issues arising from the introduction of new standards for vehicle tyre imports. MPs inquired whether the three-month period granted to importers was inadequate, pointed out limited testing facilities, and questioned if this could grant an unfair advantage to local manufacturers while placing consumers at a disadvantage.

Furthermore, the committee examined the 22 criteria used to select Aswesuma beneficiaries along with the data verification process, emphasising the need to prevent truly eligible individuals from being excluded and ineligible persons from being included.