Govt. says petrol price hike won’t increase inflation

Reuters: Sri Lanka’s move to raise gasoline prices by 6.7 per cent will not have an inflationary impact, Government and Central Bank officials said on Monday.

The country on Saturday increased the price of gasoline by Rs. 10 to Rs. 159 ($ 1.24), a record high in local currency terms, to keep State-run Ceylon Petroleum Corporation (Ceypetco) from suffering further losses.

“It won’t have much of an impact,” said D.C.A. Gunawardena, the Director General of the State-run Department of Census and Statistics, which compiles inflation data.

Central Bank Governor Ajith Nivard Cabraal said any impact would be “marginal”.

The Government did not raise the price of diesel, which has a greater weighting in Colombo’s consumer price index.

In November, the annual inflation rate in Sri Lanka rose to 9.5 per cent from 8.9 per cent a month earlier, thanks to short supply in the farm sector.