Lanka IOC, which accounts for a third of the market, is raising the price by almost 20 percent, the second increase in as many weeks.
One of Sri Lanka’s biggest fuel suppliers has hiked the price of petrol by nearly 20 percent, the second hike in as many weeks, as the country struggles to import dollar-less oil.
Lanka IOC, a fuel retailer accounting for a third of the market, announced on Saturday that it had raised the price of petrol from 254 rupees to 303 rupees (just over $1) a liter.
Two weeks ago, the company increased the price of gasoline by 25 percent.
The company said the rupee’s 30 percent depreciation against the US dollar and other major currencies this month fueled the surge.
There was no immediate price revision from the state-owned Ceylon Petroleum Corporation, but its representatives, who asked not to be identified, told AFP news agency it was almost certain to follow Lanka IOC.
Sri Lankan soldiers guard a Ceylon Petroleum Corporation gas station in Colombo to help the stations distribute oil during the fuel crisis [Dinuka Liyanawatte/Reuters]
Sri Lanka is in the midst of its worst economic crisis since gaining independence from Britain in 1948.
The island’s foreign exchange reserves have hit rock bottom as commercial banks are unable to raise dollars to finance imports of food, fuel and medicines.
At least four people have died in the past week while waiting in long lines to buy petrol.
Sri Lanka was in a deep economic crisis when the COVID-19 pandemic hit, reducing remittances from foreign workers and crippling the lucrative tourism sector – a key source of revenue for the economy.
In March 2020, the government imposed an extensive import ban in order to save foreign exchange.
Food shortages pushed food prices up 25 percent last month, with headline inflation at 17.5 percent — the fifth straight monthly record high.
Sri Lanka is also facing five-hour power outages as heat generators ran out of oil.
Three international rating agencies have downgraded the island since late last year over fears that it will default on its $51 billion national debt.
Sri Lanka announced earlier this month that it will seek an International Monetary Fund bailout, and talks are expected to start in Washington next month.
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