May 16 (LBO) – A top economist tells Sri Lanka not to delay petroleum pricing reforms by taking cover behind potential oil reserves. Sri Lanka is a net oil importer, with a fuel bill in the region of 1.6 billion dollars (160 billion rupees) last year, over 800 million dollars the year before, driven upwards by spiralling global prices of crude.
The island nation’s oil subsidy bill also grew to 320 million rupees (32 billion rupees) with the Treasury paying retailers Ceylon Petroleum Corporation and Lanka Indian Oil Corp., to hold prices steady.
“Reforming energy pricing in Sri Lanka should be a priority and reduction of subsidies has begun. If consumers face the full degree of pricing, they will be quicker to adjust to conserving energy and to alternative fuels,” Peter Morgan, HSBCs Chief Economist for Asia Pacific, told a conference of Corporate Leaders on Tuesday.
“But the potential of oil reserves in Sri Lanka should not be used as an excuse to delay pricing reform.”
Sri Lanka could strike oil off the island’s West coast, with potential reserves in the Cauvery Basin, but exploration is at early stages, with a bi