Sri Lanka allocates Rs. 15 billion for an October diesel subsidy under a three-month relief programme aimed at cushioning rising fuel costs.
COLOMBO – The Government has approved billions of rupees in financial support to prevent rising international oil prices from being fully passed on to Sri Lankan diesel consumers, with Rs. 15 billion allocated for October alone.
The programme covers both Auto Diesel and Industrial Diesel and forms part of a three-month relief package running from October through December.
Cabinet has approved a total allocation of approximately Rs. 40.65 billion for the three-month period.
The intervention follows increases in international fuel costs linked partly to continuing conflict and uncertainty in the Middle East.
Under the programme, the Government will absorb part of the additional cost rather than allowing fluctuations in international diesel prices to be transferred directly to consumers.
President Anura Kumara Dissanayake had announced ahead of the Cabinet decision that approximately Rs. 41 billion would be sought to provide fuel relief during October, November and December.
The measure could have broader economic significance because diesel prices affect public transport, freight, agriculture, construction and industrial production, meaning increases can feed through into the prices of goods and services.
Earlier in September, Cabinet spokesman Dr. Nalinda Jayatissa said Middle East tensions had contributed to higher fuel and shipping costs and that the Government was attempting to provide relief without immediately reducing the prices of every fuel category.
The three-month programme therefore represents a substantial fiscal intervention to cushion the domestic economy from global energy-market volatility.
