![Sri Lanka raises fuel retail prices; first under new VAT hike](https://th-i.thgim.com/public/incoming/gc7kk1/article67694861.ece/alternates/LANDSCAPE_1200/AFP_9V24RK.jpg)
Sri Lanka raises fuel retail prices; first under new VAT hike
The Hindu
Sri Lanka raises fuel prices due to new VAT rates, IMF reforms & economic bankruptcy in election year 2024.
The Sri Lankan Government raised retail fuel prices by ₹20 (Sri Lankan Rupee) effective from January 1 in its monthly revision, making it the first retail price hike of any commodity under the imposition of new Value-Added Tax rates.
The Government revises fuel prices monthly based on the exchange rate of the U.S. dollar and the global oil market prices. However, the January 1 hike was purely a result of the new VAT rates.
Also read: Bridge this deficit between India and Sri Lanka
Sri Lanka's VAT rate has been increased by 3% from January 1 for the band, which was previously taxed at 15%, while most VAT-exempt items have been brought under 18% in a highly unpopular move.
Last month, the International Monetary Fund (IMF) approved the release of the second tranche worth $337 million to the cash-strapped island nation, bringing the value of disbursements to $670 million in the four-year facility.
With its reforms, the IMF programme meant that the Government set cost-based tariffs for utilities, while several rate hikes on electricity consumption placed hardships on the people.
Prices of petrol and diesel, which are used widely for transport purposes, were increased by over SLR 20 per litre, becoming the first retail price hike of any commodity under the imposition of new VAT rates, the Ministry of Energy said.
![](/newspic/picid-1269750-20240725073049.jpg)
Indian-origin Canadian MP receives threat from Khalistani extremists after temple vandalism incident
Canadian MP Chandra Arya condemns Khalistani extremists polluting Canada amid rising Hinduphobia and temple vandalism in Edmonton.