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Sri Lanka hikes prices of cooking gas, milk powder, cement

May 4, 2012 (LBO) – Sri Lanka on Friday raised prices of cooking gas, milk powder and cement, after a weak rupee, tax hike and higher energy prices raised costs. The price of a 12.5 kilo liquefied petroleum gas cylinder goes up by 350 rupees to 2,396 rupees from midnight Friday, Internal Trade Minister Johnston Fernando told reporters.

Fernando said a bag of cement will also cost 70 rupees more from midnight Friday.

Cooking gas is revised on a cost formula but the state sometimes refuses to permit monthly fuel revisions to buy votes. Sri Lanka's rupee fell from 110 to 130 levels partly due to bank credit taken to manipulate diesel, kerosene and power prices.

In another bizarre move Fernando also revised prices of milk powder, on which the state has imposed price controls to score points and buy votes after the finance ministry slapped a 15 percent import tax on a kilogram.

Fernando said a 400 gramme pack of milk powder goes up by 61 rupees, while a one-kilo pack costs another 163 rupees more.

A 400 gramme pack of milk powder, widely used by the poor and marginalised, is retailed between 260 rupees to 265 rupees.

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