Mideast crisis exposes Sri Lanka's State Capture problem: Jafferjee

Advocata Institute Chairman Murtaza Jafferjee says Govt. did right thing with recent fuel price hike, but far from sufficient

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• Argues spot market levels at the time suggested petrol required Rs. 100 and diesel Rs. 200 increase

• Calls for continued structural reforms to safeguard hard-won fiscal stability, end 2SC problem of State Capture and State Capacity

• Points out economy continues to be run for benefit of "a thousand people, not the whole country"

Advocata Institute Chairman Murtaza Jafferjee said Sri Lanka's ability to withstand the economic shock from the escalating Middle East conflict will depend not only on immediate policy responses, such as fuel price adjustments, but also on addressing deeper structural problems of State capture and weak capacity.

Speaking at a CA Sri Lanka forum on 'Risk amid the Middle East Crisis: Economic Shockwaves and Sri Lanka's Strategic Response,' Jafferjee said the Government's decision to raise fuel prices soon after global crude prices crossed $ 100 a barrel was the correct response in the circumstances.

"For once, the Government is doing the right thing increasing the price," he said, noting that delaying the adjustment could have led to panic buying and supply shortages at fuel stations.

The Government increased the price of Petrol Octane 92 by Rs. 24 to Rs. 317 per litre and Petrol Octane 95 by Rs. 25 to Rs. 365.