"There was a proposal to ration petroleum but that was discarded. It would not go with today's economic realities.

"The recent price increase was recognition of this principle," he said.

Siyambalapitiya said the government was starting energy audits for its offices and was aiming to cut energy use by about 20 percent.

"We know it is a difficult target but we want to gain efficiencies in energy use," he told reporters.

He said the state-run Energy Conservation Fund had expertise on energy management which could be tapped by both the public and private sectors.

The minister denied reports that 40 percent of the vehicles on the road belonged to the state sector.

He said the government and provincial administrations had 9,500 vehicles, while state bodies, other than the Sri Lanka Transport Board, had 3,000 vehicles.

State sector had about 15,000 vehicles he said. Recently state workers got 17,000 tax slashed cars.

Sri Lanka's politicians and even some policy makers have the habit of pointing to oil imports for most of the country's economic ills, including inflation and balance of payments troubles.

Both however are due to loose monetary policy, which have little to do with oil. In most years Sri Lanka's capital imports have been higher than oil, but oil is usually blamed for foreign exchange shortages.

Senior minister said last week ministers have been asked to come up with ways to cut energy use by this week.

Oil is an intermediate input which is imported because it is cheaper that many alternative fuels. Energy use usually results in production many times its value.