Tuesday, December 30, 2008

Prices of Gas and Petroleum Products Down. Government Expenditure Slashed

Sri Lankan government announced a Rs. 16 billion "economic stimulus and concession package" to maintain growth at an optimistic 6.0% in 2009, with cuts in energy prices and incentives for exporters and industrialists. Cuts in government expenditure is also in the cards.

* Prices of gas, petrol, diesel, furnace oil, and kerosine down. Special relief package for three-wheels.
* Minimum prices set for Tea leaves and Rubber. Fertilizer subsidy for Tea growers.
* Allowances of MPs, Ministers, PM and President slashed.
* Costs of all State Institutions to be reduced.

A special cabinet meeting was called today (30) by President Mahinda Rajapaksa in order to discuss several urgent issues pertaining to the cost of living for the coming year.

Consequently, cabinet decided to bring down the prices of gas and several petroleum products with a view to strengthening the economy and bringing relief to the consumer, Minister of Trade, Marketing Development, Consumer Affairs and Cooperatives, Bandula Gunawardena announced in a special media briefing held a short while ago at the Government Information Department.

Accordingly, the price Laughfs Gas was reduced by Rs. 276, Shell Gas by Rs. 166, Petrol by Rs. 2.00, Kerosine by Rs. 10, Diesel by Rs. 10 and Furnace Oil by Rs. 10. In a special relief package for three-wheel operators, it was decided that a coupon system would be introduced where upto 4 liters of petrol would be given to each three-wheeler at Rs. 20 less than the regular price for a maximum allowance of 75 liters a month.

Minister of Export Development and International Trade, Prof. G.L. Peiris said that an assured price of Rs. 45 per kilogram of tea leaves has been set as relief for tea small holders. Also, a fertilizer subsidy has been approved for tea growers whereby they can purchase mixed-fertilizer at the rate of Rs. 1000 per 50kg.

Minister of Enterprise Development and Investment Promotion, Sarath Amunugama meanwhile said that repayments on loans given to modernize tea factories would be suspended for one year. One month's working capital would also be given to tea factories through commercial banks on the recommendation of the Sri Lanka Tea Board.

In addition, a minimum price of Rs. 150 per kilogram of rubber has been set. The cess for rubber imports has been raised to 15%.

The government would also limit the delay in refunding value added tax to exporters to a maximum of six months.

The 15% electricity surcharge that was imposed on industries and tourism will also be removed.

In addition, it was decided to cut the costs of all state institutions by 5%, the expenses of Members of Parliament by 5% each and Ministers by 10% each, those of the Prime Minister and President by 15% each, and the housing allowance of all MPs by 50%. Ministers also promised some austerity from the island's bloated public sector, which has been a drag on productive sectors.

(Courtesy: Government Information Department)