Sri Lanka is set to increase fuel prices amid rising global oil costs and supply disruptions linked to the ongoing Middle East conflict, President Anura Kumara Dissanayake told Parliament.
In a detailed statement, the President said global fuel prices have surged sharply in recent weeks, placing significant pressure on the country’s energy sector.
“Crude oil prices have increased from $81 to $114, a 40% rise. If oil prices increase by one dollar, our local fuel price increases by Rs. 2.00.
Now, prices have risen from $90 to $139, an increase of $49. Diesel has increased by $84, and when doubled, we can understand the corresponding increase in diesel prices,” he said.
He noted that Sri Lanka is already feeling the impact of these global trends, alongside delays in crude oil shipments and supply chain disruptions. Two expected crude oil shipments of 90,000 metric tonnes each have been delayed, raising concerns over continuity of supply.
The President explained that fuel pricing is influenced by several factors, including global oil prices, the strength of the US dollar, and taxes. Unlike the 2022 crisis, which was largely driven by the depreciation of the rupee, the current pressure is primarily due to rising global fuel prices.
He warned that private fuel suppliers, who control around 43% of the local market, are unwilling to import fuel unless prices reflect global market rates, as they risk heavy losses.
“As a result, we must make a decision on fuel prices very soon,” the President said, adding that authorities are working to balance supply stability with the economic impact on consumers.
The government is also exploring targeted relief measures instead of broad subsidies, while ensuring uninterrupted fuel supply and preventing shortages or black market activity.
Officials said a final decision on the fuel price revision is expected shortly as the country navigates ongoing global energy uncertainties. (Newswire)