The Sri Lankan government on Wednesday announced significant cuts in fuel prices following the IMF bailout package and signs of economic stabilisation. The move comes after Sri Lanka secured a nearly $3 billion bailout from the International Monetary Fund (IMF) on March 20.
Earlier, the Sri Lankan government introduced painful economic measures such as tax hikes and utility rate hikes to unlock the programme which led to trade unions and opposition groups organising protests against such measures."Sri Lanka has slashed fuel prices with effect from March 29 midnight," said Power and Energy Minister Kanchana Wijesekera.
The price of different petrol will be lowered by 26.5 per cent while diesel price will be reduced by 19.8 per cent and kerosene by 3.3 per cent, according to media reports. Wijesekera said the price reduction is in line with an agreement with the IMF which includes adjusting fuel subsidies in accordance with the prices based on production costs and global oil prices, it said.
The minister also said the Sri Lankan rupee is appreciating against the US dollar. Sri Lanka in April declared its first-ever debt default in its history as the economic crisis since independence from Britain in 1948 triggered by forex shortages sparked public protests.
Months-long street protests led to the ouster of the then-president Gotabaya Rajapaksa in mid-July last year. Sri Lanka's government says it will raise funds to repay its debts by restructuring state-owned enterprises and privatising the national airline.