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Tuesday, May 21, 2024

Sri Lanka’s state-owned oil firm has raised the price of petrol in the middle of the country’s greatest economic crisis

As of Monday midnight, Sri Lanka’s state-owned oil company hiked its retail pricing, a day after the Indian Oil Corporation’s local unit upped its rates, adding to the miseries of the people who are being affected by the island nation’s greatest economic crisis.

The new price of 92 octane fuel from the state-run Ceylon Petroleum Corporation (CPC) is Rs 338 per litre, an increase of Rs 84 from the previous price and now equals the per litre pricing of Lankan Indian Oil Company (LIOC).

This was the second price increase by CPC in less than a month, but the LIOC’s price increase yesterday was the sixth in less than six months. The rising worldwide prices, as well as the devaluation of the Sri Lankan rupee against the dollar after the government’s decision on March 7 to allow the currency to float freely, according to CPC officials, were the primary reasons for the decline.

Sri Lanka has been wracked by extraordinary economic upheaval since gaining independence from the United Kingdom in 1948. One factor contributing to the issue is the absence of foreign currency, which has resulted in the government being unable to pay for imports of essential goods and gasoline, resulting in severe shortages and skyrocketing costs. Since March 7, the rupee has lost more than 60% of its value, as the cost of living has risen dramatically.

The gasoline price rises occurred as a large public demonstration against President Gotabaya Rajapaksa reached its eleventh day on Tuesday, marking the beginning of the eleventh week of the unrest. The demonstrators are calling for his and his family’s resignations, accusing them of bungling the island’s increasing economic situation.

People were stranded in gasoline and gas lines, while power cuts that had not been implemented over the weekend due to the customary Sinhala and Tamil new year were reinstated on Monday. In a speech on Monday, he acknowledged his failures, including his failure to seek assistance from the International Monetary Fund and his decision to prohibit fertiliser imports, which has already resulted in enormous crop losses.

In mid-2020, Rajapaksa announced a restriction on the importation of fertilisers in order to transition to a green agriculture strategy based on organic fertilisers. The President selected a reduced Cabinet in an apparent attempt to calm the protesters that are gaining steam around the nation in demand of responsibility for mismanagement.

The meetings with the International Monetary Fund (IMF) will take place on Tuesday in Washington. Following last week’s statement that it will default on its debt for the first time in the country’s history, Sri Lanka expects to receive a minimum of $4 billion in bailout funds.

David Faber
David Faber
I am a Business Journalist of The National Era
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