Lankans hit by record fuel price hike

At midnight yesterday, in Sri Lanka’s most dramatic fuel price increases ever, a litre of diesel and petrol went up by Rs. 30 and a litre of kerosene went up by Rs. 10. The price of super diesel and high-octane petrol (95 octane) rose by Rs. 40. The decision to raise fuel prices was taken at a special Cabinet meeting held yesterday at Temple Trees. Ministers also discussed ways to cushion the impact of the price increases on the consumer.

Prices are expected to go up in a number of areas as a result of the price increases. Commuters expect bus fares to almost double, and consumers know that a rise in transportation costs will have an inevitable impact on the price of consumer goods. Following the Ceylon Petroleum Corporation’s (CPC) fuel increase, which became effective last night, the Lanka Indian Oil Corporation (LIOC) announced that they too would raise their prices with immediate effect.

“On Wednesday we increased our diesel price from Rs. 80 to Rs. 100, but as the CPC has decided to increase their price to Rs. 110, we too will increase our price to match theirs,” said LIOC managing director K. Ramakrishnan. Last night the CPC raised the price of petrol (90 octane) from Rs. 127 to Rs. 157, an increase of Rs. 30; and 95 octane petrol went up from Rs. 130 to Rs. 170. Meanwhile, auto diesel, which cost Rs. 80 rupees a litre, will now sell at Rs. 110, and super diesel, which was Rs. 85.30, has gone up to Rs. 125.30. Kerosene has gone up from Rs. 70 to Rs. 80.

Last Friday, Petroleum Resources Minister A. H. M Fowzie said the CPC had incurred a loss of Rs. 1,652 million in the first 15 days of last month, and a price hike was therefore likely. He said the corporation was losing at the rate of Rs. 40 per litre of kerosene and Rs. 40 per litre of diesel. Total losses incurred by the CPC between January 1 and April 15 amounted to Rs.7,231million, he said.

Gemunu Wijeratne, president of the Private Bus Owners Association, said a new policy on bus fares would be implemented today, and the amended bus fares published tomorrow. At yesterday’s Cabinet meeting, measures to curtail government fuel expenditure were also discussed. “One step would be to reduce the number of public functions,” a minister told The Sunday Times.

The cabinet also discussed incentives to encourage senior government servants to use public transport. Earlier yesterday, President Mahinda Rajapaksa met representatives from the energy and transport sectors to discuss ways to soften the impact of the fuel increase.