After petrol, UNF predicts diesel hike next month
By Mahangu Weerasinghe
Friday's surprise petrol price hike of Rs. 8 a litre - the highest in recent years - has triggered a chain reaction starting with an increase in three-wheeler charges.

The Sunday Times learns that while the government allowed the Ceylon Petroleum Corporation to increase the price of petrol, proposals to increase the price of diesel by Rs. 6 a litre and kerosene by Rs. 2 were turned down in an apparent bid to prevent a massive escalation in the cost of living.

In the first reaction the main opposition UNF described the petrol price hike as drastic and said it was a consequence of the government's political agenda. "The government wanted to keep fuel prices under control until the Provincial Council elections. The narrow political scheme will cause serious problems for the people," former deputy finance minister Bandula Gunewardene said.

He said the UPFA government had plunged the country into an economic crisis and the Treasury could no longer bear the burden of a massive fuel subsidy. Mr. Gunewardene said that though the government had delayed a diesel and kerosene price hike for political mileage, it was inevitable and could come by next month.

Hours before the Petrol prices were increased Treasury Secretary Dr. P. B. Jayasundara said that fuel subsidies could not go on forever. The increase came despite repeated denials by the UPFA government that it would be forced to increase fuel prices soon after the provincial council elections.

Power and Energy Minister Susil Premajayanth was among those who insisted that there would be no fuel price hike. Friday's petrol hike based on a monthly pricing formula is also still less than required, a CPC official said. He said if the formula was strictly followed the actual revisions would be Rs. 9 for petrol, Rs. 10.50 for diesel and Rs. 10 for kerosene.

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