Sri Lanka to Revamp Fuel, Electricity Pricing Amid Global Surges and IMF Conditions

Sri Lanka plans to implement a new mechanism for adjusting domestic fuel and electricity tariffs. This decision comes in response to global fuel prices surging by 20% to 35% due to Middle East conflict, rendering previous pricing methods insufficient. The new system, expected from May, will allow for more frequent price revisions, potentially weekly, to track international market fluctuations. This reform is also a crucial step to meet International Monetary Fund (IMF) conditions for loan tranches, requiring prices to reflect actual production costs. Officials stated the new formula aims to minimize the impact on low-income consumers while ensuring cost recovery.