Sri Lanka today sharply hiked fuel prices by up to 130 per cent following pressure from the IMF which advised the government to reduce the heavy subsidies.
The prices of petrol and auto diesel that will come into effect from midnight have been increased to Rs 20 per litre and Rs 14 a litre respectively, Cabinet Spokesman Rajitha Senaratne said.
Senaratne said the global oil price which fell to USD 45 a barrel had now gone up to over USD 74.
The price of diesel will rise, from Rs 95 to Rs 109 per litre, while petrol will now cost Rs 137 per litre, up from Rs 117.
The price of kerosene has been increased to Rs 101 per litre to stop the abuse of a big subsidy, Senaratne said.
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But the poor income beneficiaries and fishermen would be given assistance, he said.
Citing losses, the Indian-Oil Corporation owned Lanka Indian Oil Corporation (LIOC) had already increased the prices of fuel with effect from late March.
The Lanka IOC, which has around a one-third market share in the country is the only private retailer of fuel in the island besides the state-owned Ceylon Petroleum Corporation.
Sri Lanka had to secure a USD 1.5-billion IMF bailout two years ago and has struggled to limit huge losses at the state-run Ceylon Petroleum Corporation.
The International Monetary Fund has said it will only release the next tranche of its bailout loan if Sri Lanka implements a formula to adjust fuel prices.
There was an urgent appeal by Sri Lanka's Central Bank too, which warned that the government must ensure economic reforms.
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