Sri Lanka sharply increased fuel prices for the second time in two weeks, showing how serious the situation has become. Petrol prices were raised from Rs317 to Rs398 per litre after a 25pc increase.
Diesel prices have also gone up significantly. Diesel, which is widely used in public transport, increased by Rs79 to Rs382 per litre. This rise is expected to increase transport costs and daily expenses.
Earlier, the government had already increased fuel prices by 8pc and introduced rationing to control fuel usage. Officials now aim to reduce consumption by 15 to 20pc through these measures.
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A senior official said, “We hope to achieve a 15 to 20pc reduction in fuel consumption with the latest increase.”
The government is preparing for a longer impact of the Middle East conflict. President Anura Kumara Dissanayake has warned that the situation could continue and disrupt energy supplies.
To deal with the crisis, the government has introduced a four-day working week and encouraged work-from-home to reduce fuel demand.
The situation became more serious after the Strait of Hormuz, a major global oil route, was effectively closed due to ongoing tensions. Around 20pc of the world’s oil supply usually passes through this route.
Sri Lanka depends entirely on imported oil and also imports coal for electricity. It buys refined fuel from Singapore, Malaysia and South Korea, while crude oil comes from the Middle East.
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The government fears that a prolonged war could harm its economic recovery. The country is still recovering from the 2022 crisis when it defaulted on $46 billion debt due to a shortage of foreign exchange.
Since then, Sri Lanka has secured a $2.9 billion bailout from the International Monetary Fund, but rising fuel prices may slow recovery efforts.
Sri Lanka is facing pressure from global oil problems. Fuel prices are rising because supply is uncertain. The government is trying to reduce usage to manage the crisis. If the war continues, the situation may become more difficult.
