The Island Editorial

Now a gas stamp gundu!

It was not long ago in the wake of the Elephant Pass debacle and the grim military situation the country's security forces faced as a result that we said in these columns that the people will pay the cost of subduing an enemy who had caused so much death and destruction in this once green and pleasant land. There was not even a whimper of protest about the government's emergency revenue raising measures like the increase in the cigarette and hard liquor price and the one percent hike on the defence levy.

Sri Lankans do understand that war must have a price not only for the sons of the poor who enlist in the forces for want of other employment and the families of the thousands of victims of the Tigers' brutal terrorist strikes on innocent civilians. It is not only those who were unfortunate enough to be born in the theatre of this war and are forced by circumstances into the misery of refugee camps or worse who must feel the burden of the conflict. The rest of us living in Colombo and elsewhere far from the boom of guns and artillery shells must also necessarily share the burden. About that there is no quarrel, no argument.

But the people are certainly not willing to carry the burdens of giant multinationals who have come here to make profits and now load price increases on already groaning consumers. The gas price increase is a case in point. Then we have Sri Lanka Telecom engaging in what it calls a tariff balancing exercise and making international calls cheaper and hiking charges on local calls. A lot of sweeteners and cosmetics has been used to present as palatable a picture as possible. But the grim reality for the ordinary telephone user, people who don't make overseas calls, is the bottom line on their bills. You can bet your bottom buck that's going to be higher than what it was come July.

The government, according to yesterday's Daily News, is now backtracking on the gas price hike. The paper carried a news release from the Ministry of Finance and Plan Implementation headed by no less than the President herself, that we are going to have a new kind of stamp. This one is being issued to low income families who are consumers of gas who can surrender the stamp when they buy their gas cylinder and the trader will knock down the price by one hundred rupees.

What does that mean? That the government is going to carry that hundred-rupee tab. You don't need an economics pundit to tell you that entails all the people of this country subsidising the gas-using poor. And how are these poor people going to be identified for the subsidy? We already run the Samurdhi scheme which everybody knows is poorly targeted with the deserving left out and those clearly not entitled to the benefit basking in the glow of political patronage that got them into the lists. A creaking administrative machine nobbled by political interference is now expected to distribute gas stamps!

The people will not be fooled by this kind of gimmickry which they know very well is all on account of the forthcoming elections. We didn't have a gas price increase last year because of the presidential election. We are told on the authority of Shell Gas, a favoured investor whose billions are supposed to have contributed to the economic development of the country, that they had the blessings of the government to enforce the price increase. We've also just learned that the government paid a Rs. 400 million subsidy to the company not to increase prices in the pre-presidential election period. That was kept a deep, dark secret all this while.

The gas stamps are just a pre-election gundu as the Sinhala language so vividly describes such save-our-skins-at-election-time stunts. What is important was whether the consumer interests were adequately protected in the original agreement with Shell Gas when the company was granted a monopoly. Obviously they did not come into this country for reasons of philanthropy and cannot be expected to carry escalating international prices on their own. But those responsible for reaching the original agreement, which has still not been made public, were duty bound to have protected the consumer interest. The sharp price increase now slapped down, ostensibly in accordance with the agreement, does not suggest that they have done that part of their job. In fact, quite the contrary. Ordinary people don't want to pay more for their cooking gas merely because Shell has invested in an expensive terminal at Mabima. The investment figures might look good in BOI brochures, but not in the pockets of ordinary consumers.

If Sri Lanka Telecom was not deemed to be profitable, NTT would not have made the investment they did in buying into the company. They've also been buying some of the shares government gifted employees obviously because they think they are on to a good thing. Consumers are undoubtedly happy about the easy availability of phone connections today but not about the periodic increases in the tariff they are slapped with. Giving ministers credit cards for overseas entertaining is not the best signal to the public that a tight ship is being efficiently run so that the consumer can be cushioned as much as possible from rate hikes.

So also with electricity. Are we getting the best possible deal from private power producers as well as the CEB? Loading additional charges on captive consumers must necessarily be the last option. The people will pay for the war provided they are convinced the money is well spent. But they are not willing to be squeezed unendingly on their utilities. Politicians understand this best at election time. Hence the backtracking on gas.