Sri Lanka hiked petrol prices by 20%-24% on Tuesday and also increased diesel prices by 35%-38%, Power and Energy Minister Kanchana Wijesekera said.
In a message on Twitter, Wijesekera said government-set transport and other service charges will also increase correspondingly. "Work from home will be encouraged to minimize the use of fuel and to manage the energy crisis," he added.
Food and transport price increases will flow through to food and other goods, economists said.
Annual inflation in the island nation rose to a record 33.8% in April compared to 21.5% in March, according to government data released on Monday.
Sri Lanka is going through its worst economic crisis since independence, as a dire shortage of foreign exchange has stalled imports and left the country short of fuel, medicines and hit by rolling power cuts.
The financial trouble has come from the confluence of the COVID-19 pandemic battering the tourism-reliant economy, rising oil prices and populist tax cuts by the government of President Gotabaya Rajapaksa and his brother, Mahinda, who resigned as prime minister this month.
Economists have said fuel and power price hikes will be necessary to plug a massive gap in government revenues, but agree that it will lead to short-term pain.
