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In crisis hit Sri Lanka hike fuel prices , petrol at all-time high of ₹420, diesel ₹400 per litre

By Priyanka Verma 
Updated Date

New Delhi: On Tuesday, May 24, Crisis-ridden Sri Lanka raised the petrol price by 24.3% and diesel by 38.4%, a record hike in fuel prices amidst the country’s worst economic crisis due to the shortage of foreign exchange reserves.

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With the second fuel price hike since April 19, now an all-time high petrol would cost ₹420 rupees and diesel ₹400 rupees a litre. The hikes are likely to exacerbate galloping inflation, at least in the short-term.

“Fuel Price will be revised from 3 am today. Fuel pricing formula that was approved by the Cabinet was applied to revise the prices,” Power and Energy Minister Kanchana Wijesekara said on Twitter. “Price revision includes all costs incurred in importing, unloading, distribution to the stations and taxes.

“Cabinet also approved the revision of transportation and other service charges accordingly,” he said.

Additionally, Wijesekera said also that people would be encouraged to work from home “to minimize the use of fuel and to manage the energy crisis” and that public sector officials would work from office only when instructed by the head of the institution.

Meanwhile, the auto-rickshaw operators said they would raise the tariff to be 90 rupees per first kilometre and 80 rupees for the second onwards.

Food and transport price increases will flow through to food and other goods, economists said. Annual inflation in the island nation rose to a record 33.8% in April compared to 21.5% in March, according to government data released on Monday. This development comes following Sri Lanka being in the throes of its worst economic crisis since independence, as a dire shortage of foreign exchange has stalled imports and left the country short of fuel, medicines and hit by rolling power cuts.

The financial trouble has come from the confluence of the Covid-19 pandemic battering the tourism-reliant economy, rising oil prices and populist tax cuts by the government of President Gotabaya Rajapaksa and his brother, Mahinda, who resigned as prime minister this month.

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