Sri Lanka’s state-run Ceylon Petroleum Corporation (CPC) on Sunday slashed retail prices of diesel and petrol, the first decrease after five hikes since February, as severe foreign exchange crunch hit fuel and other essential commodities in the country. Has hindered imports, which are in the worst economic condition. crisis in decades
The new prices will be effective from 10 pm on Sunday.
The retail prices of diesel and petrol have been reduced by Rs 20 each. Both were increased by Rs 50 and Rs 60 at the end of May.
Indian Oil Company’s local operations, Lanka Indian Oil Company (LIOC), also said they would effect a reduction in prices.
The State Fuel Unit is still unable to provide the supplies. From the end of June, their supply was limited to essential services, while LIOC served individual customers.
With the government under tough pressure to pay for fuel imports due to severe foreign exchange crunch, it on Saturday launched a fuel pass scheme where issues would be rationed under limited weekly quantities.
From June 27, the government has stopped the supply of fuel and is limited to essential services only.
LIOC expanded its distribution network as the state fuel unit suspended its operations. Fuel queues several miles long have been seen near LIOC stations since then.
There have been several incidents of violence in fuel queues and around 20 people have died after spending several days in the fuel queues.
Since the beginning of this year, Sri Lanka has relied on the Indian line of credit for the purchase of fuel.
Sri Lanka, which had been dependent on Indian credit lines for fuel imports since February, has now ended this facility. The last fuel shipment under the Indian line of credit came on June 16.
Sri Lanka’s fuel and energy sectors are among the worst hit by the shortage of foreign exchange triggered by the unprecedented economic crisis.
The government declared bankruptcy in mid-April, refusing to pay its international debt. The situation created a thriving black market where people paid to secure a place in the queue and fuel was sold at 4 times the legal retail price.
President Gotabaya Rajapaksa was thrown out of power last week for his poor handling of the economy.