The Cabinet presided by President Mahinda Rajapaksa last evening decided to reduce the price of fuel and announced a Rs. 16 billion stimulate economic package to revive the tea, rubber, cinnamon and garment industries which will take effect from today.

The cabinet announced a Rs.2 reduction per litre of petrol. It was also announced that a litre of diesel, kerosene and furnace oil would be reduced by Rs. 10 per litre. Three wheelers will be provided with 75 litres of petrol per month at Rs. 20 less then the current market price.

The price of domestic gas cylinder was also reduced with effect from midnight yesterday. Accordingly, a Laugfs gas cylinder has been reduced by Rs. 276 and Shell by Rs. 166.

According to the government’s relief package concessions have been offered to the sectors of commercial agriculture, industries, services and the consumers.
The Government decided to provide 50 Kg bag of mixed fertilizer at the rate of Rs.1, 000 a bag and to maintain Rs.45 price for one kilo of tea leaves with the intervention of the Tea Board.

“The Government intends to cover the cost of this fertiliser subsidy after imposing 2 per cent cess on export tea once the price of tea exceeds Rs.300. Further the Government will also cut off the loans given for the tea factory modernisation for 2009.

The rubber industry also got a stimulus as Government decided to maintain the rubber price at Rs.150 rate.

The business sector will also benefit from the decision to reduce the VAT refunding period to maximum of six months in the proposals submitted by the President to the Cabinet yesterday.

The government also announced yesterday of the decision to slash state expenditure. Accordingly, allocations for ministries and state departments have been slashed by 5%, ministers by 10%, the President and Prime Minister by 15% and housing for MPs by 50%.