In the six months to June kerosene sales were down 11.9 percent to 74,000 metric tonnes.
Kerosene sales grew until February when prices were raised. The finance ministry said at the time that the largest consumers of subsidized kerosene were industries.
Kerosene, which is similar to jet fuel, is the most expensive refined fuel in the world market when compared to diesel or petrol.
On June 19, the Singapore price of refined petrol was 121.8 US dollars a barrel (100.25 rupees a litre with the dollar a 131.70 rupees), diesel was 130.45 US dollars (107.37 rupees a litre and kerosene 132.01 (108.66 US dollars).State interventions in energy prices have set wrong and costly incentives among users for years in addition to promoting kerosene use at the expense of cheaper fuels like petrol.
Petrol sales in June rose 5.0 percent to 64,000 metric tonnes, giving large tax revenues to the state.
Sri Lanka over taxes petrol retailing the 100 rupee a litre product at 149 rupees, while diesel is sold at a lower price, either lightly taxed or not at all.
When the price gap was greatest in the 1990s people imported large diesel guzzling vans instead of cars for private transport.
This has promoted a slew of diesel vehicle imports. The World Health Organization has recently found that diesel is carcinogenic and is contributing to the spread of cancer.