Sri Lanka prepares to overhaul its fuel and electricity pricing system as global oil prices surge, with officials promising a model that shields low-income households while aligning with international market realities.
As global fuel prices continue to climb sharply, the Sri Lankan government has decided that the existing pricing formula is no longer sufficient to manage the ongoing volatility, prompting the introduction of a new adjustment mechanism.
Deputy Minister of Finance Anil Jayantha stated that the government is now working on a revised methodology to determine fuel and electricity prices in line with rising global energy costs and economic pressures.
According to the minister, international fuel prices have increased by between 20 percent and 35 percent due to prevailing global conditions, placing significant strain on domestic pricing structures and fiscal stability.
He explained that under such circumstances, it has become increasingly difficult to continue adjusting local fuel prices using the old pricing formula, which was not designed to accommodate such rapid and sustained increases in the global market.
The minister further emphasized that the new fuel pricing formula is being carefully designed to minimize the financial burden on low-income groups, ensuring that vulnerable communities are protected from the full impact of rising energy costs.
In addition, he revealed that representatives of the International Monetary Fund will be briefed on the proposed pricing methodology, highlighting the government’s intention to align its economic reforms with broader fiscal frameworks and international expectations.
