Sri Lanka is facing the prospect of a steep increase in fuel prices, with a liter of diesel potentially rising to as high as Rs. 600, according to warnings from Dayasiri Jayasekara. The warning comes as the country prepares to receive a new shipment of fuel in early April under significantly higher premium rates.
Speaking on the issue, the MP said that the diesel shipment scheduled to arrive on April 7 has been secured at a premium rate of $45.64, a sharp increase compared to previous tenders. He explained that such a rise in premiums makes it almost inevitable that local fuel prices will climb well beyond current levels, placing further strain on already burdened consumers.
The tender for the fuel import has reportedly been awarded to Aditya Birla Group’s Singapore-based entity. Under the agreement, Sri Lanka is set to import 280,000 barrels of diesel. In addition, the country will also receive 300,000 barrels of petrol 92 at a premium rate of $18.62, along with a smaller shipment of fuel oil arriving on April 12 at a significantly higher premium of $166.
Jayasekara drew comparisons with past pricing trends to illustrate the severity of the situation. He noted that in June 2022, when diesel premiums ranged between $30 and $34, the retail price of a liter of diesel stood at Rs. 470. With premiums now exceeding $45, he argued that it would be extremely difficult to prevent prices from approaching or even surpassing the Rs. 600 mark.
The MP also criticized the government’s handling of fuel procurement, claiming that a lack of systematic planning has contributed to the current situation. He warned that the public may once again be forced to endure long queues and shortages if effective measures are not implemented promptly.
In response to the looming price hike, Jayasekara has proposed immediate relief measures. He called on the government to reduce fuel prices by Rs. 50 in the short term to ease the burden on consumers. As part of this proposal, he suggested temporarily postponing the collection of taxes imposed to repay the debt owed by the state-owned oil corporation to the General Treasury.
According to him, the total debt, originally estimated at Rs. 1,200 billion and due to be settled by 2029, has now been reduced to approximately Rs. 656 billion. He argued that delaying repayments for even a short period, such as one month, could provide the fiscal space needed to offer relief to the public without significantly disrupting long-term financial commitments.
Jayasekara emphasized that the situation is urgent, stating that once the new shipment arrives after April 7, diesel prices will inevitably rise above the current level of Rs. 470. He urged authorities to act swiftly to mitigate the impact on households and businesses already struggling with high living costs.
