Wednesday 11th March, 2026

There can be no bigger affront to Karl Marx’s legacy than the JVP’s claim that it espouses Marxism. Marx envisioned the creation of a future society free from exploitation. The latest fuel price hikes announced by the JVP-led NPP run counter to the Marxist principle of freedom from exploitation.

The sudden fuel price hikes, which have come close on the heels of the monthly fuel price revision announced on 28 February, cannot be considered legal, for they are not consistent with the Cabinet-approved fuel pricing formula. The government insisted during the recent panic buying and hoarding of fuel that the existing petroleum stocks were sufficient for more than one month, and there was no need for the public to queue up outside filling stations.

Chairman of the Ceylon Petroleum Corporation (CPC) D. J. Rajakaruna, flanked by Cabinet Spokesman Dr. Nalinda Jayatissa, gave an assurance, at a recent post-Cabinet media briefing, that the local fuel prices would not be increased in view of the global situation at least for another month or two. The fuel price revision on 28 February is proof that neither the CPC nor the Indian Oil Company (IOC) nor Sinopec purchased fuel at the current world market prices. Minister Jayatissa has reportedly claimed that fuel consumption has risen sharply over the past several days, leading to a drop in the existing reserves, and fuel had to be procured at higher global market prices. There is no way the government can justify jacking up fuel prices because the CPC prices revised on 28 February were cost reflective, and fuel stocks currently being released to the market were procured at much lower prices. Therefore, the latest fuel price increases are nothing but unfair and irrational. The motive of the government is to maximise profit at the expense of the public.

A CPC Director also made a vain attempt yesterday to justify the fuel price hikes. He said that by increasing the prices of the existing petroleum stocks, the government had sought to prevent a massive price hike upon the arrival of new fuel shipments. His flawed logic is an insult to the intelligence of the public. It is doubtful whether he was aware that oil had dropped to USD 90 per barrel from USD 119 per barrel in the world market overnight as US President Donald Trump predicted that his war with Iran was nearing its end, and G7 countries took steps to release strategic petroleum reserves to stabilise the market.

It is being argued in some quarters that fuel price increases will help reduce fuel consumption. There is no gainsaying that fuel consumption has to be curtailed during a global crisis, but that objective can be achieved with the help of QR-based fuel rationing. Huge increases in fuel prices are bound to push inflation up, with the prices of all essentials soaring. Private bus owners and trishaw operators have already demanded fare revisions. Even those who have no knowledge of Keynesian macroeconomic theory are familiar with the concept of sticky prices. Price increases are not followed by corrections in this country, and the Consumer Affairs Authority is a paper tiger.

The Opposition is of the view that the government has increased fuel prices to meet the cost of additional thermal power to be produced to overcome a generation shortfall caused by low-grade coal imports. This argument is tenable.

Meanwhile, fuel prices have an embedded debt-recovery levy that helps the CPC pass its legacy debt on to the public. This levy has enabled the IOC and Sinopec to make excessive profits, as they are not required to transfer the proceeds therefrom to the Treasury, according to a former petroleum minister. If so, the solution is to convert the debt-recovery levy into a special-purpose tax, which can be imposed on fuel marketed by IOC and Sinopec as well. It may also be possible to reduce the rate of the levy significantly by widening its application.

The unconscionable profits made from the sudden fuel price hikes are against the legal maxim that “no one should be enriched to the detriment of another”. The JVP-NPP government should be ashamed of fishing in troubled waters. It must stop exploiting the people who are struggling to make ends meet.

Tuesday 10th March, 2026

US President Donald Trump’s Epic Fury has left the world gnashing, with a global fuel shortage looming large. Oil prices have already surged past USD 100 a barrel amidst rising tensions in the Middle East. They are set to climb higher. The US-Israeli air strikes on Iran and retaliatory attacks are not likely to end any time soon. Both sides are targeting oil fields and storage facilities, sending shockwaves across the world.

Trump’s re-election led to euphoria in business circles, which mistakenly thought that he would not resort to anything that would adversely impact the global economy. But he has proved that he is not worried about the world economy at all. When Reuters recently asked him about the surging oil prices, he audaciously claimed: “They’ll drop very rapidly when this [the war on Iran] is over, and if they rise, they rise, but this is far more important than having gasoline prices go up a little bit.” Contrary to his prognosis, gasoline prices in the US rose from USD 2.92 a gallon, the lowest since 2020 to USD 3.40 a gallon. Trump’s plan to make short work of Iran has gone awry for all intents and purposes, and all signs are that the war will drag on indefinitely. It will be a huge gamble for the US to deploy ground troops in Iran. The Republican thinking, according to the likes of

hawkish Senator Lindsey Graham is now that Venezuela has fallen in line, the US may be able to gain control over about 30 percent of the global oil production if it defeats Iran and installs a puppet regime in Tehran. Hope is said to spring eternal.

Iran is apparently shifting the war to the economic front by closing the Strait of Hormuz, and doing everything possible to cause disruptions to the global oil supply. Worse, the intensifying conflict in the Middle East has raised significant concerns about a potential global recession due to energy supply shocks and crippled shipping routes. The region is a critical chokepoint, accounting for roughly 20% of global oil and liquefied natural gas shipments, and supply disruptions threaten to spike inflation and slow global growth.

Managing Director of the International Monetary Fund, Kristalina Georgieva, has warned about worldwide inflation risks arising from the conflict in the Middle East, pointing out that every 10% increase in oil prices, if sustained for most of the year, could lead to a 40-basis point rise in global inflation. This is an unnerving proposition, especially for vulnerable economies, such as Sri Lanka, which is emerging from a crippling economic crisis. The developing nations are without sufficient foreign currency reserves to withstand long-term shocks from a protracted Middle East conflict.

Bangladesh has reportedly been compelled to close its universities as part of a strategy to weather energy supply disruptions due to the Middle East conflagration and the closure of the Hormuz Strait. Other countries in this region and elsewhere may have to adopt such drastic measures to overcome possible fuel supply shortfalls. Bangladesh is reported to have posed daily limits on fuel sales due to panic buying and hoarding.

A trade unionist representing the Opposition in this country has warned of a possible fuel shortage despite the government’s assurances that there are sufficient petroleum stocks. He has urged the government to keep the public informed of fuel availability regularly. He may have issued that warning in good faith, but it is fraught with the danger of triggering another panic buying spree. It was with the greatest difficulty that the government brought fuel panic buying and hoarding under control a few days ago. Everyone ought to act responsibly at this juncture.

There is no need to hit the panic button yet, but urgent action is called for to prevent a possible fuel crisis. The available fuel stocks must be properly managed as the possibility of suppliers invoking the force majeure clause in agreements due to the worsening Middle East crisis and the resultant supply disruptions cannot be ruled out. It will be extremely difficult to replenish fuel supplies in such an eventuality. Prudence demands that the QR-based fuel distribution be reintroduced at the first sign of trouble. There’s no shame in rationing fuel during a global crisis.

Monday 9th March, 2026

The JVP-NPP government came to power, promising to play a messianic role and cleanse Sri Lankan politics, but a dirty coal procurement deal has blackened its reputation. Its leaders and propagandists are unashamedly trying to obfuscate the issue of procuring low-quality coal and causing huge losses to the ailing economy. They have made a fresh attempt to muddy the water by asking for further testing of the low-grade coal, which has already caused a loss of about Rs. 9 billion to the state coffers. It has now been proved beyond any doubt that the South African coal procured from an Indian supplier, Trident Chemphar Ltd., is substandard, and the government manipulated and delayed the tender process to enable Trident to secure the coal tender. But no heads have rolled.

The Commission to Investigate Allegations of Bribery or Corruption has recently indicted Energy Minister Kumara Jayakody before the Colombo High Court for corruption, accusing him of having caused a loss of over Rs 8.8 million to the state by allowing a private company to make undue financial profits, when he was in the Fertiliser Company. The Opposition has told Parliament that there are allegations of money laundering against a top official of the coal supplying company, and the local agent of the outfit is facing an International Cricket Council ban for malpractices. It has therefore blamed the coal racket on an unholy alliance.

The Public Utilities Commission of Sri Lanka (PUCSL), in a report on the Lakvijaya Power Plant (LVPP) performance and financial impact of the use of the newly procured coal, has revealed that the plant cannot produce power at its full generation capacity using the coal supplied by Trident. A graph in the PUCSL report shows that LVPP output rose to 300 MW when the Russian coal procured from the previous supplier was used, but it dropped significantly when the South African coal supplied by Trident was burnt. It is not possible to use more coal per hour to meet the generation shortfall as the limit set by the plant manufacturer is 110MT per hour, the PUCSL has said.

The PUCSL has confirmed excessive steam temperature levels, several times higher than the prescribed limits, due to the burning of coal procured from Trident. It has also revealed that the coal supplied by Trident has caused the fly ash discharge to increase by 102 percent. If the problem persists, it could damage the LVPP turbine besides resulting in excessive corrosive wear and overheating of the equipment in the boiler system, according to the PUCSL.

Warning of possible power cuts due to the use of inferior quality coal affecting generation capacity of LVPP, the PUCSL has said the risk to the continuous electricity supply was assessed based on the peak demand forecast submitted by the Ceylon Electricity Board for 2026. According to the PUCSL report, the analysis assumed that hydropower plants could contribute up to 1,300 MW to meet the night peak demand while LVPP could contribute only up to 690 MW due to a capacity shortfall, assuming about a 40 MW generation capacity reduction from each unit.

The SLPP-UNP government earned notoriety for bribery, corruption and waste. The JVP/NPP used that corrupt regime as a foil to market what it made out to be its commitment to upholding accountability and ushering in good governance to secure a popular mandate to rule the country. The least the JVP-NPP government can do to salvage its good governance credentials, if at all, is to remove Minister Jayakody from the Cabinet forthwith, cancel the coal tender, and institute legal action against the culprits. If it continues to defend him and keeps on trying to cover up the coal scandal, it will only bolster its critics’ claim that the JVP and the NPP have benefited from the mega coal racket, the way the UNP gained from the Treasury bond scams in 2015.

The SLPP-UNP government defended its Health Minister Keheliya Rambukwella when he was exposed for a pharmaceutical scandal. But it allowed him to be arrested and remanded when it became too embarrassing for it to shield him. But the JVP-NPP government continues to defend Jayakody, making a mockery of its much-advertised commitment to good governance.