Sri Lanka Raises Fuel Prices Again as Inflation Pressures Mount

Sri Lanka increased fuel prices by around 4% on Sunday, intensifying inflationary pressures that have already surged sharply over the past month as the country grapples with a deepening energy crisis.

The latest hike follows a series of increases since March 2026, with fuel prices rising by more than 35% dueing that period, alongside similar increases in gas and electricity tariffs, reflecting mounting strain on the country’s energy supply system.

Authorities have introduced fuel rationing measures in response to supply disruptions, adding further pressure on key economic sectors. State-owned Ceylon Petroleum Corporation announced on Sunday an increase in kerosene prices, widely used in agricultural equipment, to 265 rupees ($0.85) per liter, up by 10 rupees.

Petrol prices rose by 12 rupees to 410 rupees ($1.32) per liter, while diesel increased by 10 rupees to 392 rupees per liter.

Rising energy costs have pushed inflation to more than double its previous pace, reaching 5.4% in April, according to official data released by Department of Census and Statistics Sri Lanka.

Officials said higher fuel and electricity prices have driven up transportation costs, which in turn have fed into food prices and other essential goods, amplifying the cost-of-living burden on households.

The latest developments come as Sri Lanka continues a fragile recovery from its 2022 economic collapse, when the country ran out of foreign currency reserves needed to finance critical imports such as food, fuel, and medicine.

Compounding these challenges, the country was hit by a devastating tropical storm in November that killed at least 643 people and affected more than 10% of its 22 million population. The disaster caused an estimated $4.1 billion in direct economic damage, particularly to infrastructure and agriculture, according to the World Bank.

Sri Lanka is attempting to stabilize its economy with support from a $2.9 billion bailout package agreed with the International Monetary Fund in early 2023. However, persistent increases in energy costs continue to pose a major challenge to recovery efforts.