Gravy Train

Nov 21, 2008 (LBO) – The Sri Lankan government has increased the customs duty on imported petrol by 10 rupees per litre to 35 rupees from yesterday, a senior Treasury official says.

We are increasing the taxes to trim the extra profits the two petroleum companies are making with the sudden drop in world energy markets, says S R Attygalle, Director General Fiscal Policy of the Treasury.

This will not have an impact on the price of petrol at the pump.

The government’s budget for 2009 reduced the price of petrol by 15 rupees which included a 10 rupee duty waiver

The price of diesel was reduced by 30 rupees.

We have removed the 10 rupee duty waiver on petrol, says Attygalle.

Currently, the retail price of petrol is at 142 rupees, and diesel at 80 rupees per litre.

From the day of the budget speech two weeks ago global energy prices have dropped by a further 10 dollars, to 48 dollars a barrel.

This phenomenon is known as a deflationary price collapse where commodity markets collapse after bubbles created in the financial system due to excessive money printing by central banks such as the Federal Reserve.