Sri Lanka has implemented a fuel price increase of up to six percent, marking the latest step in its efforts to align with International Monetary Fund (IMF) mandates. Effective Sunday, the state-run Ceylon Petroleum Corporation raised petrol to 434 rupees and diesel to 407 rupees per litre. This adjustment follows the recent disbursement of a $695 million tranche from a $2.9 billion bailout package, as the nation works to stabilize its economy and move toward full cost recovery for energy services.

The decision reflects the government’s commitment to phase out energy subsidies by September, a condition emphasized by President Anura Kumara Dissanayake in recent communications with the IMF. With Sri Lanka relying entirely on imports for its oil and coal needs, the ongoing instability in the Middle East has exacerbated financial pressures, forcing a 48 percent hike in fuel costs and a 33 percent increase in electricity tariffs since February. As the country continues to recover from its 2022 debt default and economic collapse, officials remain concerned that any further escalation in global energy prices could significantly derail the island’s fragile path to recovery.