Sri Lanka announces fuel price hike to meet IMF loan conditions and stabilize finances
2026/5/31 14:41
The Sri Lankan government announced today that it will raise fuel prices by up to 6% to meet the International Monetary Fund’s (IMF) loan requirements, gradually eliminating energy price subsidies to stabilize domestic finances and the economy.
State-owned Ceylon Petroleum Corporation stated that gasoline will rise from 410 rupees per liter to 434 rupees (about NT$41.23 per liter), while diesel will rise from 392 rupees to 407 rupees.
In the past, the Sri Lankan government heavily subsidized energy prices to keep them low, which was one of the reasons for the country’s fiscal collapse and sovereign debt default.
The International Monetary Fund reached an agreement with Sri Lanka in early 2023 to provide bailout loans and help stabilize the country’s finances, but on the condition that Sri Lanka should cancel subsidies on electricity and fuel prices and guide the market back to normal price mechanisms.
This IMF four-year loan, totaling approximately US$2.9 billion, had the first tranche of US$695 million disbursed a few days ago, and Sri Lanka, as agreed, gradually reduced energy price subsidies and announced the fuel price increase.
Sri Lankan President Anura Kumara Dissanayake wrote to the International Monetary Fund stating that the country’s fuel subsidy policy will be fully abolished by September this year. (Translation by Chi Jinling) 1150531
