A leading academic has ignited debate in Sri Lanka after revealing that a private oil company operating in the country was able to generate its entire annual profit within just three weeks following a recent fuel price revision. Speaking during a televised discussion on Hiru TV, Professor Prasanna Perera highlighted how the pricing changes have disproportionately benefited certain players in the energy sector while placing increasing pressure on the general public.
According to Professor Perera, the sharp increase in fuel prices has allowed oil companies and distributors to secure unusually high profits in a very short span of time. He further noted that the government and the Ceylon Petroleum Corporation are also gaining significantly through higher tax revenues linked to these price hikes. In some cases, employees within certain companies are even receiving bonuses tied to these gains, raising concerns about inequitable distribution of economic benefits during a time of hardship.
The broader economic implications, however, paint a more troubling picture. While the Central Bank of Sri Lanka continues efforts to stabilize inflation, Professor Perera stressed that the burden of rising costs is falling squarely on ordinary citizens. The increase in diesel prices has driven up transportation and production expenses, triggering a chain reaction that affects the price of essential goods, including agricultural produce in key markets such as Dambulla. He described this as a classic “multiplier effect,” warning that such cascading cost increases could ultimately slow down the country’s overall economic growth.
Adding to the concern is Sri Lanka’s fragile external position. The professor revealed that out of the country’s reported $7.3 billion in foreign reserves, only about $5.5 billion is actually usable. He pointed out that fuel imports alone account for roughly one-fifth of the nation’s expenditure, underscoring the heavy dependence on energy imports and the vulnerability it creates.
In light of these challenges, Professor Perera suggested that the current crisis could serve as an opportunity for strategic policy shifts. He called for renewed negotiations with the International Monetary Fund to secure more favorable terms, while also urging the government to ease the tax burden on citizens to stimulate economic growth. Without such interventions, he warned, the imbalance between corporate gains and public hardship could deepen, further straining Sri Lanka’s economic recovery.
