After usual taxes, price of petrol should be less than Rs. 80 - Mahinda
Going by the price of crude oil, petrol should now be less than Rs. 80 and diesel less than Rs. 50 per litre even after all the usual government taxes, former President Mahinda Rajapaksa said today (28). Issuing a statement he added that taxes have to be justifiable and reasonable. “It is in that light that we should examine the tax increases that are to come into effect from 2 May 2016.” Statement – “No state can exist without taxes. A government needs revenue to carry out its functions and taxes are charged not only on the incomes of the rich but on goods and services used by the general population as well. Even essential items such as fuel, telecommunications, electricity and food are often targeted for taxation because such goods and services will be bought regardless of the price and therefore guarantees revenue. However, taxes have to be justifiable and reasonable. It is in that light that we should examine the tax increases that are to come into effect from 2 May 2016. The international prices of virtually everything that we import declined after this government came into power in January last year. In 2014 the average price of crude oil was 96 USD per barrel. Today it’s around 40 USD. Wheat which cost 230 USD per tonne towards the end of 2014 is now around 165 USD. Milk powder which was over 5000 USD per tonne in 2013/14 is now around 2000 USD. Sugar which was 414 USD per tonne in 2014 is now 334 USD. Steel which was 300 USD per tonne in 2014 is now around 90 USD or less. Urea fertiliser which cost 325 USD per tonne in 2014, is around 200 USD today. During my tenure in office from 2006 to 2014, the international prices of all these commodities were much higher. Between 2011 and 2013 crude oil was consistently above 105 USD per barrel and went below 100 USD only after September 2014. The price of urea fertiliser reached 750 USD per tonne in 2008 and remained above 500 USD throughout 2011-2013. Steel reached a high of 1,265 USD in 2008 and until 2013, was always over 500 USD per tonne. Wheat went up to 440 USD per tonne in 2008 and sugar reached a high of 655 USD per MT in 2011 and the prices of both commodities remained high throughout my tenure in office.