Sri Lanka raise fuel prices after IMF loan instalment

AFP | Colombo

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Sri Lanka raised fuel prices by up to six percent yesterday, in line with IMF plans to recover energy costs and phase out subsidies to stabilise the economy.

Petrol was raised to 434 rupees ($1.33), up from 410, while diesel increased to 407 rupees a litre from 392, the state-run Ceylon Petroleum Corporation said.

The price hike came days after the International Monetary Fund released a $695 million instalment of a $2.9 billion bailout loan, agreed in early 2023 to stabilise the cashstrapped South Asian nation.

The IMF wants Sri Lanka to ensure cost recovery for both fuel and electricity tariffs, which have been subsidised by the government since the start of the conflict in the Middle East in February.

President Anura Kumara Dissanayake, in a letter to the IMF made public by the Washington-based international lender, said fuel subsidies will be phased out by September.