Fuel price hikes and consumer heartburn
By Asif Fuard
In the wake of last Sunday's fuel price increase – the second to be effected in just 31 days – food, hardware, building material, clothing and transport are among some of the main sectors bound to see price increases in the next few weeks.

Hospital ambulance services and police patrolling were expected to suffer due to the unexpected fuel hike so soon after the previous increase. With the government increasing the price of petrol, diesel, kerosene and furnace oil, the transport sector has been directly affected and this has indirectly impacted on the prices of vegetables, coconuts and fish. Many eating-houses too have raised prices of the food served.

Last Sunday's fuel hike saw the price of petrol being increased by Rs. 6, diesel by Rs. 4, kerosene by Rs. 2 and furnace oil by Rs. 2. Comparing last Sunday's price increases with that of May 5, petrol has increased by Rs. 10 and diesel by Rs. 8 within one month.

As usual when prices are increased it is the families of low-income groups or those with no fixed incomes who are bound to suffer the most and this time too they are dealt a severe blow with the price of kerosene going up by Rs. 2.

According to the revised prices, Lanka Petrol 90 Octane will be sold at Rs. 80.00 a litre, Lanka Petrol 95 Octane at Rs. 83.00, Lanka Auto Diesel at Rs. 50.00, Lanka Super Diesel at Rs. 55.30, Lanka Kerosene at Rs. 30.50, Lanka Furnace Oil 1500 Sec. at Rs. 30.30 and Lanka Furnace Oil 3500 Sec. at Rs. 28.00.

Transport, one of the sectors affected a result of the increase in diesel prices has already passed the buck to the commuters with the private bus owners association already effecting an increase in bus fares by 15%.

The Private Bus Owners’ Association president Gemunu Wijeratne told The Sunday Times the increase in fuel costs is the highest when compared to other increases and if the bus fares were not immediately increased it would have been near impossible to staunch a breakdown in the transport industry.

"If we don't increase the bus fares we will be operating at a severe loss and we would have been forced to cut down the number of turns a private bus does each day," he said.

The problems caused by the fuel price increase is bound to play a major part in rural hospitals since most of these hospitals would end up reducing by half the ambulance service they provide since it would be too expensive to run a normal ambulance service. Some hospitals have even gone to the extent of refusing to ask for more ambulances as the cost of operating them would mean an additional drain on the budgets of the rural hospitals.

Ragama Hospital Director Dr. S. Wickremasinghe said in case of a power failure they would have to think twice before using the diesel-powered generator as the fuel quota given to the hospitals was insufficient.

Another fall-out is that most hardware store owners say they will have to raise the prices of items such as cement, sand, bricks, metal and iron rods. It is learnt that hardware stores situated in the south and east will be badly affected since most of them complain that it is because of increased transport costs they increase the prices of their goods and now with the new prices they would have to raise prices further.

A hardware store owner in the south K. Ranaweera said he was operating at a loss because the recent increase in fuel prices has added to his already heavy burden. "Since the fuel prices has shot up people like us in the south have to suffer. The situation is worse in many rural areas since they have to pay more to transport hardware items. I am forced to cut down on stocks of some goods now", he said.

Wholesalers of vegetables have also increased prices blaming it on the diesel price hike. The price of an already expensive coconut has risen further by another Rs. 2. Those who transport coconut from Kuliyapitiya to Colombo say that they will have to shorten the distances to save on costs.

Most owners of vans transporting office staff are planning on stopping their services as they find it extremely difficult to operate. Sunanda Perera who owns five vans and operates a transport service said that he would close down and operate a driving school instead as he is finding it hard to cope with the rising fuel prices.

"I spend between Rs. 15,000 to Rs. 20,000 a month only on fuel and now it will increase. That's why I decided to operate a driving school instead", he said.

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