By Upatissa Pethiyagoda –
One is confused. For an year or more, we have been promised a “Pricing Formula for Petroleum products”. The mountain labours, with no hint of a mouse.
The Sinhala equivalent (with unintended mirth) is “Mila Suthraya”. In common parlance, a Sutharaya (or Suthraya), means a trick, a deception, a delusion or puzzle, or a “Vijjawa”.
One would have thought that it does not require an Einstein, a Hawking, Abdul Kalam or an Eliezer to come up with a “Formula”. Crude oil is imported and subject to a Fractional Distillation (at Sapugaskande). It is heated and separated in condensation towers into fractions. The Fuel Gas comes out at the lowest temperature, followed by Petrol, Naphtha, Kerosene, Diesel and the residue into Furnace Fuel, Lubricants and Tar (as sediment). Thus, considering the input of Energy required, Petrol should be cheaper than Kerosine which should be cheaper than diesel. This is not so, and is Part One of the “Suthraya”.
Gas should be the cheapest, but may be not so, because of extra costs in liquefying under pressure and bottling.
The breakdown of crude prices into components would be related to the relative percentages obtained. Still, allowing for this in pricing is not very advanced mathematics.
The recent lament of the President is that even he does not know can be significant. We are therefore not alone in being in the dark on this matter. The increase in the value of Crude Oil and the drastic devaluing of the Rupee are cited as the reasons. This is debatable. But even if true, this could be easily taken into account.
In normal language, a “formula” means an equation with set terms, requiring only the numbers to be inserted. The main variables are the Crude Oil price and the percentages of the different products while apportioning the Energy costs. Depending on these two factors, the need may arise to deal with each product separately.
Unless my reasoning is faulty, we are, as usual, being taken for a glorious ride. It is also an insult to the mathematical abilities of our citizenry. So low is the credibility in all organs of Government, who have a record of repeatedly duping us, that this is not just a further step in that direction. Incidentally, what has happened about the infamous “Hedging operation” which cost us dearly? Have the culprits responsible for this amateurish and criminal Scam been identified and duly punished? Since by implication, the Corporation and Ministries concerned seem to be jointly responsible for this latest Scam, they deserve to be identified and compelled to call off this bluff?
If the Petroleum Corporation is making losses despite ripping off the Public, they may look out for their inefficiencies, Fraud and Institutional incompetence. Meanwhile let us join the President in awaiting the disclosure of The Magic Formula.