Kero Hurdle

Sept 6, 2007 (LBO) – Sri Lanka would make a fixed payment to poor households on income support from this month but limit a promised subsidy to fishermen to one month, a senior minister said. Ceylon Petroleum Corporation would make a 4,000 rupee one-off payment to 16,036 fishermen for the month of August at a cost of 320 million rupees, information minister Anura Yapa told reporters.

“After August the Fisheries Corporation would come up with a guaranteed price for fishermen,” Yapa said.

Economists had pointed out that fishermen are gainfully employed people who should not be paid a subsidy especially because their output is sold to others.

Like a fertilizer subsidy, a production subsidy does not help producers but is eventually passed onto customers through lower producer prices.

Meanwhile 641,000 low-income families on income support would receive 100 rupees a month from September at the cost of 64 million rupees a month.

Sri Lanka under-prices diesel used by the commercial sector and richer sections of society including politicians and businessmen who can afford diesel guzzling luxury jeeps while overpricing by more than 30 percent petrol which is used by small car