Price Balance

Oct 30, 2011 (LBO) – Sri Lanka has raised pump prices by around 10 percent with petrol prices going up by 12.00 rupees a litre and diesel by only 8.00 rupees, widening an already existing gap. The standard 90-Octane petrol will now cost 137 rupees at the pump and the premium 95-Octane 155 rupees. Auto diesel will cost only 84 rupees and kerosene 73 rupees.

Analysts say price hikes will help reduce pressure on an exchange rate peg with the US dollar and match re-balance domestic demand.

Petrol is now and 63 percent more expensive than diesel, despite costing less to import than diesel.

Refined diesel is traded at a higher price internationally as the fuel contains more energy and is also retailed slightly higher than petrol in other countries. Kerosene is traded at an even higher price. Jet fuel is also similar to kerosene.

The Singapore wholesale refined price for petrol was around 81.88 rupees a litre last Friday according to Central Bank data when an exchange rate of 110.10 rupees was used. Diesel was 86.76 and kerosene 87.68 rupees.

Diesel is used by business and rich people who own luxury jeeps and pick-up trucks. Petrol is used by small car owners, motorcycles a