In crisis-hit Sri Lanka petrol prices surge, to cost LKR 338 per litre

Sri Lanka's state-run Ceylon Petroleum Corporation has raised the price of 92 octane petrol to LKR 338 per litre - an increase of LKR 84, news agency PTI said. The increased price - approximately ₹80 per litre - adds to the burden of the Sri Lankan people, who are struggling through the island nation's worst financial crisis in living memory.

CPC's new price now matches the per litre price of Lankan Indian oil company (LIOC). This is CPC's second price hike in a month, while LIOC’s yesterday was the fifth in six months.

CPC officials said high global prices of oil and the depreciation of the Sri Lankan rupee against the dollar after the government's March 7 decision to have a free float was the main cause.

Sri Lanka is fighting a crisis triggered in part by a lack of foreign currency, which means it cannot afford to import staples like food and fuel. Since March 7 the Sri Lankan rupee has fallen by over 60 per cent as cost of living skyrockets.

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India has moved to extend lines of credit worth over $2 billion for essentials, as well as $500 million in fuel aid under which around 300,000 tonnes of fuel have been supplied, despite which fuels stations there are likely to run dry.

The fuel price hikes come as public agitation against president Gotabaya Rajapaksa entered its eleventh day Tuesday. 

Rajapaksa on Monday said he had made mistakes, including failing to approach the International Monetary Fund for help earlier, and pledged to correct them.

He also acknowledged the error in banning imported fertilisers in favour of home-grown organic options; critics say the ban hurt farmers.

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The government has also been blamed for taking out large loans for infrastructure projects - notably from China - that have not brought in money. 

READ: Sri Lanka's Rajapaksa acknowledges mistakes amid crisis

The negotiations with the IMF will be held in Washington, D.C. in the United States today.

Sri Lanka, which last week announced a default on its $51 billion foreign debt, hopes to secure a $4 billion dollar bailout. The IMF was reluctant but 'may consider' the request, Reuters said, after India put in a good word.

READ: Sri Lanka to default on external debt of $51 billion pending IMF bailout

Protests against Rajapaksa and the Sri Lankan government - key posts in which were held by his family members till the cabinet was forced to quit - broke out last month, leading to some violence in capital Colombo and other cities.

With input from PTI, Reuters