The Special Report

19th November 2000

Soaraway COL sours season

By Tania Fernando and Nilika de Silva

With the festive season around the corner when expenses generally go up, thousands of people are lamenting that because of the recent price hikes in diesel, kerosene, industrial – auto gas and other items they are being forced to pay for the price of other people's extravagances and excesses including a jumbo cabinet and its multitude of accessories.

With the increase of diesel by Rs. 2/ a litre from Friday, the already overburdened consumer will be at the receiving end of all prices. Along with the diesel and kerosene price hike is also the increase of industrial and auto gas by 20% and 27% respectively, which have left the people in an explosive mood.

A cross section of interviews by The Sunday Times revealed that the people are expecting once again the Cost of Living to soar.

Private school vans, which most parents depend on, are already reflecting the price hike. The last hike in diesel saw the fare going up from Rs. 1000 to Rs. 1100. van owner/driver W Jayatilake told The Sunday Times that this time he would be raising it by Rs. 50/- a child.

The Pettah Market, which was a hive of activity on Friday afternoon, was already making the necessary changes to keep up with the hike on gas and diesel prices.

"Whatever price hikes come along we just act as a springboard and make them bounce off us in the right direction, said Amarapala, a tradesman. Explaining that as businessmen they cannot bear the burden of price changes, Amarapala said, "We feel sorry for the consumers but there is nothing for us to do but pass the burden on."

Already a bag of Samba rice priced at Rs. 1700 was being increased to Rs. 1950. Although the rice was being brought from Polonnaruwa, Anuradhapura and Vavuniya the excess spent on the rice would never reach the farmers.

The increase in industrial and auto gas prices could also have an effect on gas converted vehicles. There are about 20,000 vehicles using gas at present. Now the chances of people switching to the domestic cylinder, which has a safety risk, are more.

"I converted my car to gas because petrol was expensive, but now it looks like gas might be as expensive as petrol. I feel I might have wasted Rs. 38,000 converting my car from petrol to gas" Indrajith a young professional said.

He also said that although life has to go on he has to be more careful with the usage. "When I converted my car one year ago the price of gas was only Rs. 22, but now it has increased to Rs. 31.60 and with no competition it might keep rising", he said.

The 20% increase in the industrial/commercial cylinder would also affect large industrialists.

The General Manager of a leading biscuit manufacturer said the hike would lead to an increase in their cost of production, but they had to think twice before increasing prices, since it was a competitive market.

"It is almost impossible to continue with the present prices. We might have to either reduce production or cut down on our employees", he said.

Many observers believe that it was a mistake on the part of the government to give sole monopoly to Shell Gas Lanka for if there was competition, the prices might have been more stable.

Lanka Auto gas Industry chairman W. K. H. Wegapitiya said the increase was unreasonable and unjust, and felt this was due to giving Shell the monopoly. "We agree world prices have gone up, but they should still be able to manage to sell at the old price".

The privatization agreement signed between Shell Gas and the Government does not cover industrial and auto gas. While the agreement clearly states that domestic gas can be increased by 10% a year, the 10% maximum increase does not apply to industrial or auto gas.

Meanwhile, UNP Media spokesman. Karunasena Kodituwakku said whenever there is a profit it is not passed on to the consumer, but when there is a price increase it is passed on to the public. "The government gave Shell Gas a grant of Rs. 480 million to build the terminal in Kerawelapitiya, but it is very doubtful that they would give another company the money too," he said.

However, in a statement Shell Gas Lanka says the company is presently facing heavy losses due to escalating global LPG prices and the devaluation of the rupee.

"We have absorbed as much of this cost increase for as long as possible to protect our customers. However, the Company has had to examine the current trend of LPG prices in the world market and accordingly adjust the selling price of our products for our business to be viable", the release said.

Meanwhile Minister of Transport Dinesh Gunawardena said no decision has been made with regard to the increase in bus fares. "We will be having discussions whether there should be an increase after which a decision will be made". He also said that there have been many requests by various transport organisations for an increase, but first discussions have to be held with treasury officials.

Higher and higher

According to Hector Kobbekaduwa Agrarian Research & Training Institute, the prices of several agrarian products rose due to various factors during the past week. It said these prices would further increase due to the fuel hike.

Following are some of the items which have gone up in price .

Rice

Due to increase in wholesale prices, the prices of both local and imported rice increased by about cents 0.25 a Kg.

Onion

Due to low stocks the price increased.

Potato

The price increased due to low supply.

Coconut

Due to low supply from major producing areas considerable increases were observed in the market.

Harder and harder

Hitting out at the recent hike an already heavily burdened cross section of society expressed their views :

"I feel the Government is responsible for this hike," said Mohomed Izhan a bus driver from Athurugiriya. "We have to now pay an excess of Rs. 200 a day for Diesel."

Izhan who is the sole breadwinner of his family says he will find it hard to make ends meet as the cost of food items too would go up. Now that the cost of food will go up he will be hard put to make

"These price increases are going to affect us in every way," Lalith Kannangara an instructor at Auto air-conditioning said.

"It is very unfair. When world prices go up the government increases the price of fuel, however when the world prices go down they never reduce the fuel prices here," he charged.

"They say the price of domestic cylinders will not be increased, but I am sure it will go up," he said.

He charged there was an excess staff at the Petroleum Corporation. "When the government came in to office there was a workforce of 3,000, now it has gone up to 7,000. "And it is we who are paying for all that," he complained.

"This is going to affect our homes in a big way," said Chandrasiri, a threewheeler driver from Piliyandala. Telephone charges, electricity and prices of food items will all go up. "Life is going to become even more difficult," he said.

A school van driver and owner, Jayathilake, said the hike in diesel prices will leave him with no option but to increase the fare he charges for each child." Soon I will have to charge Rs. 50 more from each child," he said.

"The price of all goods will all go up," a parent K.D.T. Fernando from Ja-ela said. Last time the price of fuel went up, the van fare also went up from Rs. 1000 to Rs. 1,100. Now once again the price of diesel has gone up ," she lamented.

"There will be an effect on all goods," said Rohan a tradesman in Pettah engaged in importing dry rations. Inspite of these being imported items automatically the price goes up he explained.

Brave Ajith not forgotten

The Foundation for Civilian Bravery has nominated K.A.Ajith, whose story of bravery was highlighted in The Sunday Times on October 29 titled "No rewards for man of courage", to be considered for the award of their gold medal for the year 2000.

Ajith (29) is recovering from injuries he suffered while giving chase to a suicide bomber on October 19 near the Town Hall.

Ajith says he blocked the path of the bomber who was running towards the Town Hall bus stand and possibly saved the lives of many innocent civilians who were there waiting to board buses.

The terrorist was therefore forced to run towards the main entrance of the Colombo Municipal Council building where he subsequently exploded his suicide jacket killing himself and three others and injuring a number of persons including Ajith who had continued to give chase to the bomber until the time of the blast.

Ajith lay unconscious in the hospital for four days and is recovering from injuries to his leg and head. His mouth has been badly injured affecting his speech.

Since returning from hospital, Ajith has made a statement to the Cinnamon Gardens police station on the events that took place on the day and also to the CDB at Gregory's Road. The police have informed him that the appeal he made to consider him for a reward for the role he played on that fateful day, would be forwarded to the IGP.

Ajith who drove a three wheeler to make a living would be unable to return to his old job until he fully recovers from his injuries.

Formidable opposition to controversial water tax

By Dilrukshi Handunnetti

Amidst mounting opposition against govern ment moves to levy a tax on natural waterways, posters depicting Parakramabahu the Great, the symbol of irrigation in ancient Sri Lanka have appeared in many parts of the country, while the drafting of the controversial Water Resources Authority Bill is coming to a close along with amendments to the Irrigation Act, authoritative sources said.

With the media taking the administration to task for trying to impose an unfair water tax denying a right enjoyed by the public for centuries, the Ministry of Irrigation and Water Resources Management has been quick to deny it, but not to elaborate.

Despite authorities maintaining a stoic silence except to deny ' that there was any intention to levy a water charge either from farmers or from users of well water as alleged in the media', there was no clarification whatsoever of the intention to impose a tax on users of natural waterways such as rivers and canals which has caused public worry.

Through the propagation of 'water as a commodity', the government is expected to swiftly bring in the necessary legislation which is expected to be presented to Parliament for approval by mid next year.

Galle district UNP parliamentarian and agricultural expert Hemakumara Nanayakkara said that the government was trying to deny a right of the people which was intrinsically woven into the Sinhala culture, with the imposition of this unfair tax.

He said that it was disgusting that a government which came into being by pledging to abolish the UNP-imposed water tax, was trying to further burden people who are finding it difficult to eke out a bare living.

" The city people already pay a water tax. But the burden of this tax would fall essentially on the rural peasant using natural waterways for all his endeavours be it cooking, cleaning, bathing, washing clothes or agricultural pursuits" he claimed.

He said that the country's backbone, the farmers and other cultivators would be vastly affected as though there is no mention of agri-water at the moment, but said it was only a matter of time.

The proposal to impose an agri-water tax was originally proposed in 1989 and was not implemented due to heavy opposition. The proposal is one of the recommendations made by lending agencies such as the World Bank, the International Monetary Fund, Asian Development Bank, World Trade Organization and the World Food and Agriculture Programme .

Environmental lawyer Hemantha Withanage said that these moves were efforts to accommodate the lending agencies. He said that the government was trying to introduce a new water management policy with far reaching repercussions, based on a proposal made by the International Irrigation Management Institute (IIMI) which had conducted several pioneer projects in certain selected areas in Sri Lanka.

He said that the UNP government way back in 1984 introduced a water tax on farmers, which went largely unpaid. Though action was filed against the farmers, there was an immediate reverting to the former position largely due to protests.

" After implementing this proposal, anyone who does not possess a water permit could be taken to task and a fine imposed for breaching the provisions" he said.

It is reliably learned that the Legal Draftsman is expected to finalize the legislation shortly, which is to be submitted for immediate Cabinet approval. The Act will empower the Authority to value natural water based on the concept of 'water as a commodity', register and develop natural ground water resources within the entire country, make an inventory of good water resources, ensure equitable distribution of water and recognize the state having the salable right of any such registered water.

While excluding private wells, the Authority is expected to regulate any other resource qualifying as ' water resource', and also impose a static tax on the public for water entitlement in water resources such as rivers, ponds, tanks, canals and such others.

Inside the glass house

Editorial/ Opinion Contents