Sri Lanka urges sparing use of power, fuel; hikes prices again

Colombo : The Sri Lankan government on Sunday urged the public to use fuel and electricity sparingly to cushion potential shortages amid volatile global oil markets.

This came as the island nation raised fuel retail prices at midnight, the second such hike in a week.

As a conservation measure, the government had rationed fuel retail distribution based on a QR code issued for each vehicle.

“We urge the public to consume electricity and fuel mindfully and limit energy consumption to a minimum,” said government spokesman and minister Nalinda Jayatissa.

He warned against hoarding fuel and sought information on such attempts.

The minister's statement comes in the backdrop of Iran's ongoing war with the US and Israel, which has led to the closure of the Strait of Hormuz, a strategically important choke point for the world's energy supplies.

With the two cost escalations, the fuel retail prices are set to return to the levels of the 2022 economic crisis, when the island nation declared its first-ever sovereign default since gaining independence from Britain in 1948.

The unprecedented financial crisis led the then-president Gotabaya Rajapaksa to quit office in 2022 amid civil unrest.

Jayatissa said that despite the recent fuel price hikes, the government is still incurring a monthly cost of Rs 20 billion by subsidising Rs 100 per litre of diesel and Rs 20 per litre of petrol.

The minister said that in the absence of the fuel revision, the government would have had to bear an additional burden of approximately USD 1.5 billion.

Starting February 28, the US and Israel have launched a massive joint attack on Iran and with Iran's retaliation, it has extended to the entire Gulf region. Iranian strikes in Hormuz have affected maritime traffic in the strait, which is crucial for global supply chains for crude and oil.