Sri Lanka Sunday raised fuel prices by 7.8 percent, a month after a 16.5 percent increase aimed at easing pressure on the worsening balance of payments situation. The state Ceylon Petroleum Corporation said a litre of 95-octane gasoline will go up by 7.79 percent to 83 rupees (83 US cents) while a higher grade diesel would be 55.30 rupees a litre, up from 51.30 rupees a litre.
A spokesman said the increase was in keeping with an agreed formula to offset losses in the face high crude oil prices.
The government during talks with the World Bank in Washington in April had said it would increase domestic fuel prices after May 1 and also carry out the privatisation of the energy sector.
High international oil prices have seriously affected the country's main state-run CPC which was being subsidised by the government.
The Marxist-backed government had resisted earlier pressure to adjust prices in keeping with increasing global prices, but the authorities argued that a price increase was also needed to discourage high consumption.
Sri Lanka's overall balance of payments showed a 205 million dollar deficit last year compared with a surplus of 502 million dollars in 2003, mainly due to higher expenditure on the import of oil.
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