With the Covid-19 crisis hitting the global oil industry hard, plummeting crude oil prices allowed the Ceylon Petroleum Corporation (CPC) to rake in nearly USD 2 billion in profits, a former senior economist at the Central Bank said.
Despite the state-owned CPC making a profit of nearly Rs. 400 billion, no relief was passed down to the consumer.
Speaking on the condition of anonymity, the former CBSL official said that the incumbent government has used the CPC profits to offset the losses incurred by the state after providing huge tax concessions to crony capitalists.
In April 2020, the coronavirus pandemic resulted in crude oil prices hitting a major slump with crude prices falling to USD 26 per barrel. However, it is alleged that the Gotabaya Rajapaksa government has misappropriated the USD 2 billion in profit without passing the benefit to the consumer.
According to the former senior CBSL official, the price of a barrel of crude oil in the world market was USD 62.49 when the new government assumed office in November 2019.
Since then, global oil prices had continued to fall and by April 2020, Brent crude oil had dropped to USD 26.46 per barrel.
However, the CPC at that time had imported crude oil at USD 19.56 per barrel.
It was only in March 2021 that global crude oil prices recovered to levels similar to when the previous 'good governance' government was voted out of office. A barrel of crude oil was recorded at USD 65.89.
The former CCBSL economist further pointed out that these facts and figures can be verified from the weekly economic data released by the Central Bank of Sri Lanka.
According to the data, the current government has made significant profits to the tune of USD 2 billion through fuel imports but has failed to pass any relief to the public, the official noted.
If the fuel price formula introduced by the former government wasn't scrapped, the public could have received a subsidy of at least Rs. 25 per litre in the past few months.
Profits used to bring down luxury SUVs ? - Mangala
Meanwhile, former minister Mangala Samaraweera alleged that the Finance Ministry has siphoned off nearly USD 2.5 billion after scrapping the fuel price formula that he had introduced during his tenure as the minister of finance.
He questioned whether the government is now trying to use that money to buy luxury duty free SUVs for parliamentarians which he had suspended in 2019.
"Having scrapped fuel formula in ‘20, FM has siphoned off nearly US$ 2.5 B which ought to have passed onto the consumer when Oil Prices fell to an all time low in April 20 for nearly an year. Is the money been used for the duty free SUVs for MPs which I as FM suspended in ‘19?," the former finance minister tweeted.