Sri Lanka’s top 30 percent of society consumed and overwhelming 70 percent of fuel sold in the country and subsidies are effectively channelled to the rich, World Bank country economist Ralph van Doorn said.
Pricing reforms were required to fix state enterprises, which have now become fiscal risks, van Doorn said.
“Since the non-poor are the largest consumers of fuel and electricity the administered fuel prices are an effective subsidy to the non-poor funded indirectly by fiscal resources,” World Bank’s Sri Lanka Development Update for 2017 said.
The share was much higher than the consumption of fuel by the bottom 40 percent of earners directly and indirectly through public transport, the report said.
In all countries most of the income of the poor go to food, and energy consumption goes up with income as they travel more and use powered equipment and air conditioning.