The Sri Lankan subsidiary of India’s Indian Oil Corporation has jacked up the prices of petrol and diesel with effect from Friday.
The Lanka Indian Oil Company (LIOC) made the move due to significant depreciation of the Sri Lankan Rupee.
This is the third time the firm has increased fuel prices in a month.
The retail price of diesel was raised by Rs 75 per litre and petrol by Rs 50 per litre.
This takes the price of petrol to a sky high Rs 254 per litre and diesel to Rs 214.
The nation has never seen such hikes before, and is currently mired in its worst economic crisis in decades.
Prices Rising Everywhere
The national currency, the Sri Lankan Rupee, has depreciated twice in the span of seven days by Rs 57 against the US Dollar.
This has had a direct impact on the cost of oil and gasoline products, making them dearer by the equivalent amount.
The prices were anyway surging due to the West imposing numerous sanctions to isolate Russia and cut it off from the global oil markets.
LIOC does not receive any subsidy from the Sri Lankan government and its losses are calculated based on actual landed cost of the product after considering payment of applicable duties, taxes and other statutory levies including handling charges.
Country And Company Lose
The State is said to be losing 128 Rupees from each litre of diesel as of March 10 and 80 Rupees from a litre of petrol.
The current losses are exorbitantly high due to current international prices, leaving the company no option but to raise the prices of gas, oil and gasoline.
Even after these hikes, there would still be heavy losses at the prevailing international prices, said Manoj Gupta, Managing Director of LIOC.
Rival Firm Also Hikes Prices
LIOC’s rival State-run fuel distributor Ceylon Petroleum Corporation has also followed suit.
It has increased the price of petrol by 77 Rupees (LKR – Sri Lankan Rupees) and diesel by 55 Rupees.
This takes the price of petrol to a record 254 Rupees a litre and diesel to 176 Rupees.
Diesel is still 38 Rupees below the Lanka IOC price.
India Provides Fuel
Last month, the Sri Lankan government had decided to purchase 40,000 metric tonnes each of petrol and diesel from the Indian Oil Corporation in an effort to tide over the current fuel and energy crisis.
It is considering options to facilitate measures to prevent fuel pumps from going dry.
Long queues at understocked pumps across the country are becoming a common sight.
There has been a shortage of almost all essentials due to the lack of dollars to pay for the imports.
India Provides Assistance And Loan
The Indian government had announced in January that it will give a billion-dollar assistance package in addition to other balance of payment support to Sri Lanka.
The credit line will fund the country’s fuel, food and medicine imports, the finance ministry said.
A $900 million loan to Sri Lanka was also announced which would build up its depleted foreign reserves and for food imports due to a shortage of almost all essential commodities.