COLOMBO: One of Sri Lanka’s biggest fuel suppliers increased prices by as much as 12 per cent on Saturday, as the cash-strapped island’s energy crisis worsened.

Lanka IOC, a fuel retailer that accounts for a third of the market, said it was increasing prices for diesel — commonly used by public transport — by 12pc, and that of petrol by 11pc.

The increases came after a seven per cent price rise three weeks ago and will add to the upward pressure on inflation, already at a record high.

The island is in the grip of an economic crisis after the tourism sector, a key foreign-exchange earner, collapsed in the wake of the Covid-19 pandemic.

The government imposed a broad import ban in March 2020 in an effort to save foreign currency.

The country is now suffering widespread shortages, including fuel, electricity, automotive parts and cement, with supermarkets forced to ration staple foods like rice, sugar and milk powder. The shortages pushed food inflation to 25pc last month with overall inflation at 16.8pc.

Several thermal power stations, meanwhile, have closed with the electricity utility extending daily power cuts to five-and-half-hours a day from Friday.

Published in Dawn, February 27th, 2022