Dec 10, 2008 (LBO) – Sri Lanka’s President Mahinda Rajapaksa rejected a price-formula for fuel amidst growing public displeasure at exorbitant pump prices set by government for both petrol and diesel. Opposition activists had already gone to court asking for relief on petrol over-pricing in particular. Official data shows that the wholesale price of refined petrol was only 22.68 rupees a litre on Monday, diesel 39.29 rupees.
But petrol is retailed at 122 rupees, and diesel 80 rupees. Petroleum sector officials have said that freight and insurance is only about two rupees a litre.
“It is our endeavour to keep the present prices of petrol, diesel and kerosene for nearly one year at the same level,” President Mahinda Rajapaksa said in a prepared speech released to the media.
“With this it will be possible to offset the losses of last year and gain the strength to go ahead with our development work.”
Almost all the development activity in the country is financed by foreign loans, from donor governments or increasingly export-import bank financing of supplier countries.
The government spends more than it takes from the people in taxes and other reve