Sri Lanka Raises Fuel Prices Amid Inflation Surge

On Sunday, Sri Lanka raised fuel prices by nearly four percent, further exacerbating inflation, which doubled to 5.4% in April. This increase follows a 35 percent rise in fuel prices and a similar increase in electricity rates, attributed to disruptions in supply linked to the Middle East conflict.

The state-owned Ceylon Petroleum Corporation raised the price of kerosene to 265 rupees per liter, petrol by 12 rupees to 410 rupees, and diesel by 10 rupees to 392 rupees. The surge in energy prices has significantly impacted transport costs and food prices, as reported by the Department of Census and Statistics.

Sri Lanka is still recovering from a severe economic meltdown in 2022, which depleted foreign exchange reserves necessary for importing essential goods like food, fuel, and medicine. The country is also grappling with the aftermath of a cyclone in November that killed at least 643 people and caused an estimated $4.1 billion in damages.

To stabilize its fragile economy, Sri Lanka secured a $2.9 billion bailout agreement with the IMF in early 2023.