Consumer and Gas Prices in Sri Lanka
Posted on February 23rd, 2018

Sarath Wijesinghe – former Chairman Consumer Affairs Authority- former Ambassadors to UAE and Israel

Consumer in Sri Lanka

Consumer in Sri Lanka is not organized as in other parts of the world in protecting and enhancing their due rights under the legal system. They accept whatever is given by the trader, manufacture, industrialist, and the state (regulator – that is the Consumer Affairs Authority) in the absence of a vigilant and a powerful consumer movement. In the United Kingdom the Consumer movement and media (with magazine WHICH” the powerful consumer magazine) are in the forefront working together assisted by – DTI Department of Trade and Industry the main regulator in UK on consumerism. Gas is a clean and cheap form of energy utilized in the household now spread in the villages as a necessity in the industry especially in the food industry in large scales, which has a direct impact on cost of living with price increases on increase of gas. Traditional methods of generating energy has replaced by gas industry monopolized by two leading giants Laughf” and Litro” (previously Shell) all over the country which has a direct impact on the cost of living. They have the countrywide network of distribution as a necessary consumer item which has a direct political and economic impact on the citizen and the state.

Why only Gas as a source of Energy

Every drop of gas which is a by-product in the oil industry, and also fond independently ( such as in Israel) is imported, stored in terminals in liquid form and distributed by the network of the two companies, now demanding price increases via the regulator Consumer Affairs Authority which has the authority under Section 18 of the CAA act to permit companies for increase of prices on an application made after due consideration by the regulator on the justification of the request having considered all aspects of the demand for the increase. Gas is a protected item under the CAA with few other items declared by a gazette notification to control the maximum price to ease the consumer in the receiving end while protecting the trader who is expected to be fair and reasonable. Gas has become so impotent by the consumer and industrialist that it has become a powerful voice of the citizen to maintain the price to combat fast growing cost of living due to other factors and price increases of food and consumer items. Traditionally Wood has been the main source of energy which has an impact on environment and leads to deforestation and environmental issues. Many other innovative methods of cheap, clean and environmental friends methods were introduced but not property marketed by the state instructions. Coconut/Paddy husk, Bio Gas, solar Energy, Energy Saving methods, and many kinds and types of alternate energy were used with no success and popular appeal.

Gas prices and cost of living

Gas prices have a direct effect and impact of the cost of living as it increases the cost of the household and the other bakery, consumer, industrial products and many food/ consumer and

manufactured items as the a main source of energy next to electricity which is expensive. Unfortunately with the increase of the gas prices the trend is disproportion price increases of all consumer items which have no control by the CAA the main regulator responsible for the price increase. CAA is expected to make a decision considering all circumstance heavily contested by the powerful companies with the legal team in higher courts which often obtain their redress with high pressure legal and political as the inquiring officers at the CAA (generally politically appointed members of the CAA board) are influenced by the Minister in charge who always takes political decisions through the political appointed Chairman who are often not competent to handle a situation. We take this opportunity to demand the State to make arrangements to appoint the CAA Chairman by the Constitutional Council to be independent and competent.

CAA the main Regulator/Player on combating cost of living

CAA as the main Player/Regulator on combating cost of living here are series of decided cases in the legal domain on this contentious issue which has a direct political and economic impact on the country as a whole for which careful consideration is necessary as a matter of compromise/importance. It is inevitable the companies will take to litigation if they are not satisfied with the new price formula. Arriving at a compromise solution may not be easy especially with the incompetent and inefficient CAA head and some members who appear not delivering goods with millions spent out of tax payer’s money for the maintance of this defunct and ineffective institution which has enormous powers to act for the public benefit. It is learnt that the President is contemplating to meet the CAA in order to find their views to combat the rising cost of living through the recently formed Apex body on handling economy!. CAA is the best available main regulator responsible to the public in combating cost of living by establishing consumer organizations and activism in educating the consumer, industrialist and trader for a proper consumer regime. How many such organizations are formed and to what extent the CAA has been in a leading role is a matter the consumer/citizen will be in a position to judge.

Way Froward

Gas is commonly used by the citizen, manufacturer and industrialist in day to day life and industry which is a sensitive topic which has direct impact and relevance to the citizen. This has to be careful handled with a short and long term solutions. Control of price increments are to be handled carefully, and long and short term changes in the CAA is a necessity by appointing able and competent head selected by the constitutional council and not on political criteria. Chairman is preforming a semi judicial functions and a person with legal background or a retired Judge is preferred. Alternate energy providers such as solar and new innovations should be explored especially cater the villages and a powerful consumer activism and formation of consumer organisations should be formed with countrywide network. Special emphasis should be given Israel way of innovative methods of generating energy with the abundance of our resources, such as solar, wind, bio, waste, and introducing various forms saving mechanisms. Let CAA start the campaign to mobilize the citizen/organizing consumer organisations/education programs countrywide with the help of legal aid unit and civil society, on 15th March 2018 the world consumer day!

Writer who takes responsibility for the contents could be contacted on sarath7@

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