Sri Lanka: Oil company Lanka IOC raises fuel prices again

Service station of the company Lanka IOC, in Colombo, on March 26.

© AFP

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1 min

Sri Lanka is sinking even deeper into crisis.

The Asian country is overwhelmed with debts and does not have enough foreign currency to pay them.

He is also overwhelmed by the rise in the price of oil, which has doubled in four months.

These factors drive up inflation and the local currency loses value.

To compensate, one of the largest fuel suppliers in the country has just raised the price of gasoline by nearly 20%, the second such increase in two weeks. 

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From our regional correspondent,

Lanka IOC, which distributes a third of the island's gasoline, raised its prices by 20%, two weeks after raising them by 25%.

There is no choice, assures the company, because oil is bought in dollars and the Sri Lankan rupee has lost 50% of its value in three weeks against the greenback.

Its competitor, the public operator Ceylon petroleum, will certainly do the same.

►Also read: Sri Lanka paralyzed by a very serious fuel crisis which affects transport

This huge increase will cause inflation in transport and affect basic necessities.

However, since wages are not increasing at the same rate, the most modest inhabitants are likely to suffer more from this crisis, unprecedented in the history of the country.

Gasoline is also used to generate electricity.

However, the indebted state cannot buy enough, which leads to power cuts of more than five hours a day.

It compensates with its hydroelectric plants, but we are in the dry season and the water reserves of the dams should run out within three weeks.

So far, only China has offered a $2.5 billion loan - but that can only be used to repay other Chinese loans and import equipment, also from China.   

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• Sri Lanka