Fridays were freaky during the Yahapalanagovernment. It became a day of both expectation and trepidation for the people. Former President Maithripala Sirisena was the trendsetter for the Friday feeling after he chose a Friday to oust his Prime Minister Ranil Wickremesinghe and decided to install Mahinda Rajapaksa as the prime minister instead.
Sirisena’s penchant for Fridays even got him an entry in Wikipedia. In its description of Sirisena, the encyclopedia says that he is well known for surprising Sri Lankans by issuing gazette notices every Friday since 26 October 2018. The Wikipedia entry describes how in 2018, Sirisena appointed former President Mahinda Rajapakse as the Prime Minister, wrote a letter firing his Prime Minister Ranil Wickremesinghe and prorogued parliament, all in apparent contradiction to the constitution of Sri Lanka and instigating a constitutional crisis.
It was on Friday last week that Energy Minister Udaya Gammanpila also broke with tradition and announced the fuel price hike. By his own admission he volunteered to make the announcement which historically has been made by the finance minister. He was not delivering glad tidings. His announcement came as a double whammy to a populace already having to pay the price of a governance riddled with mismanagement and a lack of transparency and accountability. Like a tidal wave the effects of it are threatening to push the people alreadycrippled by a botched Covid response plan, loss of livelihoods and sky rocketing cost of living, to the edge. The news of the fuel price hike was only beginning to sink in when a statement signed by the chief secretary of the Sri Lanka Podu Jana Peramuna (SLPP) SagaraKariyawasm went viral. In a nutshell the statement, on a SLPP letterhead, denounced the actions of Gammanpila at a time of economic woe for the people because of Covid. It chided him for not anticipating the difficulties the government will have to face as a result and for not taking timely decisions. The statement decreed that he should resign from his post of subject minister.
Gammanapila did not waste time. On Sunday, two days after the announcement about the pricehike, he held a press briefing in his ministry. He gave an A-Z run down about how the President, Prime Minister and key government ministers were involved in discussions which led to the decision for a price increase. He revealed how in keeping with the Finance Act, the prime minister who is also the finance minister, signed the document endorsing the price increase before he made the announcement. He said Ajith Nivard Cabraal, who is the State Minister for Finance, Capital Markets and State Enterprise Reforms, had been by his side when he made the announcement because the finance minister could not be present. Gammanpila was emphatic that both the president and prime minister were standing by him.
What Gammanpila omitted to mention during his A-Z run down at the press briefing is the fuelstabilization fund which was set up by the government and which the Central Bank had arecord of in its 2020 report. When the current government took over office it did away with the fuel price formula the Yahapalanagovernment adopted in 2017 to adjust the prices of fuel in the domestic market to reflect those in the international market. The adjustments, made on the 10th of every month, was done with the intention of giving the maximum benefit to the consumer when world oil prices fluctuated but also for a more transparent and less corrupt process. The rationale given by the current government when it did away with the formula was that instead of passing on the benefit of fluctuations in oil prices in the world market to the local consumer, it will channel the money into the Fund. It gave an assurance that when global fuel prices increase, the money in the Fund will be used to keep domestic fuel prices down. Global oil prices have been coming down in the last couple of years. In 2019 the price of a barrel of oil was $64 and in 2020 it was averaging at around $43 a barrel. Last year the saving to the country from fuel imports was $1.3 billion. According to Opposition parliamentarians the Fund would have had atleast 260billion rupees. The speculation now is that the money in the fund was used to bail out the Ceylon Petroleum Corporation (CPC) to which state –owned enterprises like the Ceylon Electricity Board and Sri Lankan airlines are in debt to the tune of some 140 billion rupees. According to the Finance Ministry the government had also propped up the CPC, which had a net profit of 2. 37 billion rupees in 2020, with an issue of a Treasury guarantee of $ 1. 8 billion.
The government has to come clean about its realreasons for the fuel price hike and the fate of themoney in the Fund without resorting to amateurish reasons such as the one given by the Prime Minister that the increase was to build the local economy. Not to know that a fuel price hike will have a debilitating knock-on effect on the local economy starting with an increase in the cost of basics like food and transport will only show up the Prime Minister’s ignorance and how removed he is from reality.
When the Cabinet of ministers met this week they approved proposals tabled by Gammanpilato award M/S Petrochina International (Singapore) Pte. Ltd the contract to import1,137, 500 barrels of diesel from 1 June 2021 to 31 January 2022 and M/s Conscio Ltd., Nigeria to import crude oil from 1 June 2020 to 28 February 2022. One reason for the government to buy oil from these countries and not from OPEC could be the credit lines they offer. It is not a public secret anymore that the government is cash strapped, contrary to assurances by cabinet ministers Johnston Fernando and NamalRajapksa.
Gammanapila has become a catspaw in the machinations of a government desperate to save face from the fallout of the fuel price hike. The government knows it is a move which will make it deeply unpopular. He has also unwittingly perhaps become the victim of powerplay in the SLPP, manipulated by Basil Rajapaksa, who waits in the wings for his entry to government. The no confidence motion which the Samagi Jana Balawegaya has said it wants to move against Gammanpila in the coming days will re position the fuel price issue and give it the visibility it needs. It could also potentiallybecome a double edged sword against Gammanpila who if so may have to lay down his hat. For Sagara Kariyawasam, the no confidence motion will also be the playing field to show his hand.
