Sri Lanka’s state-run oil company raises fuel price amidst crisis

COLOMBO: Sri Lanka’s state oil entity has raised its retail price from Monday midnight, a day after the Indian Oil Company’s local operation raised its prices, adding to the woes of the people who are impacted by the island nation’s worst economic crisis.

The state-run Ceylon Petroleum Corporation’s (CPC) new price of 92 octane petrol Rs 338 per litre is an increase of Rs 84 and now matches the per litre price of Lankan Indian oil company (LIOC). This was the second price hike by CPC within a month whereas the LIOC’s yesterday hike was the fifth in six months. The CPC officials said the high global prices and the depreciation of the Sri Lankan rupee against the dollar after the government decision on March 7 to have a free float was the main cause.

Sri Lanka is grappling with unprecedented economic turmoil since its independence from Britain in 1948. The crisis is caused in part by a lack of foreign currency, which has meant that the country cannot afford to pay for imports of staple foods and fuel, leading to acute shortages and very high prices.

The rupee has fallen by over 60 per cent since March 7 with the cost of living soaring high. The fuel price hikes came as a massive public agitation against the president Gotabaya Rajapaksa entered its eleventh day on Tuesday. The protesters demand the resignation of him and his family for bungling the island’s worsening economic crisis. People continued to be in fuel and gas queues while the power cuts which were not imposed during the weekend on account of the traditional Sinhala and Tamil new year returned on Monday.

In an address on Monday, he accepted his mistakes – not seeking the help of the IMF and his decision to ban fertiliser imports which have already caused massive crop losses. Rajapaksa in mid-2020 banned the use of fertiliser imports in order to turn to a green agricultural policy with organic fertiliser. He appointed a smaller Cabinet as if to appease the protests which are gathering momentum in the country for accountability for mismanagement.

The negotiations with the IMF will be held on Tuesday in Washington. Sri Lanka expects a minimum 4 billion dollar bailout after last week’s announcement to default debt for the first time in the island’s history.