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IOC entry a miserable failure
Container transporters compelled to increase rates by 45 percent

Allowing the Indian Oil Company (IOC) to enter the local market as a competitor to Ceylon Petroleum Corporation (CEYPETCO), so that consumers would benefit, has failed miserably, the Association of Container Transporters (ACT) said.

It said that transport rates will be increased by 45 percent as a result of increased fuel prices, as the impact on heavy vehicles, with their higher litre capacities, is much more than for normal ‘light’ vehicles.

The ACT came down on the inefficiency of the public sector and said that it was the consumer that had to bear the resulting costs.

"The delay in the port which amounts to seven to eight hours per vehicle results in excess use of fuel and escalates the cost of container operators and requires the urgent attention of the authorities. The number of man hours lost is clearly visible for anybody who witnesses the long queues at the port access road at Ingurukade junction."

The costly delays at the port are due to inefficiencies of the Sri Lanka Customs (SLC) and Sri Lanka Ports Authority (SLPA).

"Both organisations operate at the same place and each point the finger at the other for causing the delays but the truth is they are both causing the delays," Sunil Fernando, President, ACT told the Island Financial Review.

"We had brought this issue, and many others, to the notice of the authorities for the past two decades and have not got a response," he said.

The ACT said that the industry was the bridge between shipper, consignee and the port (and the consumer as well).

"It is the only conduit for exporters and importers. However, this industry has been neglected by all governments."

The increase in diesel prices to Rs 110 a litre announced by CEYPETCO and OIC last month, had a ripple effect on the transport industry.

"It is proved that whenever there is an increase in the price of fuel, within no time the prices of all commodities increase in par. Hence when considering a price revision due to a fuel (price) increase we cannot ignore these indirect price increases which impact our industry," the ACT said.

According to the association, engine oil, transmission oil, brake oil had all increased four fold during the recent past.

Tyres have increased in price as well and are beyond the purchasing power of the container transport industry with containers running on 16 heavy duty tyres.

Batteries have sky rocketed in price while servicing costs, spare parts, wages and electricity costs have increased as well.

The container transport industry has employed thousands and has provided a pool of heavy vehicle drivers for employment overseas. Fernando estimates that the livelihoods of about 10,000 depend on the industry.

For an economy which depends more on imports to feed its people and provide other consumer items, the end result of the fuel price increase is yet to be felt.

"The indirect impact of the fuel price increase on consumer items, especially on food, will be felt in a few months, as it usually takes time. But many unscrupulous traders have already increased prices haphazardly not at all in proportion to the fuel price increase. It is an inherent weakness of the system," an official of the Censes and Statistics Department said.

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