PUCSL seeks fuel pricing powers

The Public Utilities Commission of Sri Lanka (PUCSL) is of the view that bringing fuel pricing under its regulatory authority, as originally envisaged at the time of its establishment, would strengthen public trust by ensuring that related decisions are made through a clear, transparent and consistently applied framework grounded in actual costs and reasonable margins, it is learnt.

Speaking to The Daily Morning yesterday (24), well-placed sources within the PUCSL stated that although the regulation of the petroleum and drinking water sectors had been included in the PUCSL’s mandate in the Second Schedule as far back as 2004, the legal provisions required to activate that role have yet to be enacted. “When the PUCSL Act was introduced in 2002, it was intended to establish a multi-sector regulatory framework covering electricity, petroleum and drinking water. However, due to the absence of enabling legislation for the latter sectors, our authority has remained limited to electricity regulation,” the sources said.

They further noted the Government had pledged in its policy manifesto, presented ahead of the Presidential and Parliamentary Elections, to grant the PUCSL the authority to determine fuel prices. “At present, we have no role in the fuel pricing formula. Decisions are taken by the Energy Ministry. The NPP has pledged to entrust the PUCSL with the necessary powers to regulate the fuel and drinking water sectors as originally intended. However, it is yet to be done,” they said.

Responding to queries on the likely impact of such a move, PUCSL sources pointed to the Commission’s experience in the electricity sector. They noted that electricity tariffs are now determined through a transparent formula that accounts for all the relevant costs and allows reasonable returns for service providers without placing an undue burden on consumers. “People are aware of how electricity tariffs are set today. When adjustments are made for justifiable reasons, there is public acceptance because the process is clear and credible. We know everything including the cost of generating a unit of electricity, the impact on consumers, and the extent of any relief provided,” they explained. Speaking further, they said that applying a similar methodology to fuel pricing with the involvement of the PUCSL would ensure fairness for both suppliers and consumers and help address persistent public scepticism. “If a transparent pricing formula is introduced for fuel as well, people will have confidence in it. It will benefit both the Government and consumers. When there is a need to increase fuel prices, it can be done openly and explained clearly. People are more likely to accept such decisions. However, when fuel pricing is carried out through a process that is not visible, doubts are inevitable.” 

In recent months, fuel pricing has come into focus, particularly after a series of revisions that unsettled many consumers. Questions have emerged about how prices are calculated, especially given the lack of clarity in the current formula and whether it truly reflects global market movements.

Source - The Morning