Fuel prices were last adjusted on May 11.

Diesel Petrol Gap

Super Diesel would go up by 4 rupees to 76 while 95-octane petrol would go up by 5 rupees to 114.

Kerosene which is heavily subsidized as it is used by poorer sections of society was raised by 16 rupees to 67.

Furnace oil of 1500 sec. grade has gone up from 43.70 to 47.70 while furnace oil of 3500 sec. has gone up from 38.65 to 42.65.

Sri Lanka overprices petrol which is used in small cars and motorcycles while keeping diesel prices low.

Diesel is used by businesses and it also drives 3 and 4 litre gas guzzling SUVs driven by politicians, senior government officials and the super rich sections of Sri Lankan society.

The country, a small island with less than 20 million people, has more than a 100 ministers, most of whom drive diesel-powered SUVs.

Instant Solution

A special ministerial committee headed by the country's prime minister was given the daunting task of finding a solution to the energy crisis, which analysts say was a tall order for a group of ministers running a small Indian Ocean island.

In an interim statement, a spokesman said that alternative energy sources must be found, though most alternatives are even more expensive than petroleum and some energy sources are just breaking-even now because oil prices are rising.

After deliberating for nearly three weeks on a problem that had been dogging humankind for some considerable time, the committee had now decided to allow an increase in fuel prices.

In 2004, a government backed by the Marxist-nationalist Janatha Vimukthi Peramuna came to power promising to lift a monthly fuel price adjustment formula, in an economic strategy that was popularized as "removing the plug" from the global economy.

Inflation which was hovering near zero shot up to 18 percent just eight months after fuel price controls were put in place and the national currency collapsed from 96 rupees to the dollar to 105 and budget deficit rose with the cost of subsidies.

This week the rupee fell below 111 to the dollar.

Economists have pointed out that Sri Lanka needs a monthly fuel adjustment formula to protect the country and the poor from the economic shock of under-pricing oil.

Most of Sri Lanka's energy is consumed in the Western Province around the capital, where poverty is lowest.