Sri Lanka raised fuel prices by nearly 4% today, further fuelling inflation, which more than doubled last month due to the Middle East war.
Since March, Sri Lanka has raised fuel prices by more than 35%, while gas and electricity rates have also increased by a similar amount.
The island has also rationed fuel following supply disruptions.
On Sunday, the state-owned Ceylon Petroleum Corporation increased the price of kerosene – used by agricultural machinery – to Rs265 (US$0.85) a litre, up Rs10.
Petrol rose Rs12 to Rs410 (US$1.32). Diesel was up Rs10 to Rs392.
Higher energy prices pushed inflation to more than double, reaching 5.4% in April, according to official data.
Fuel and electricity tariffs drove up transport costs as well as food prices, the census and statistics department said.
The island has been slowly emerging from the 2022 economic meltdown, when it ran out of foreign exchange reserves to pay for essential imports such as food, fuel and medicines.
However, it was hit hard in November by a cyclone that killed at least 643 people and affected more than 10% of the island’s 22 million population.
The storm caused an estimated US$4.1 billion in direct physical damage to buildings and agriculture, according to the World Bank.
The country has been stabilising its fragile economy with the help of a US$2.9 billion IMF bailout agreed in early 2023, but high energy prices have seriously challenged recovery efforts.
