Amid renewed tensions between the United States and Iran, global oil prices continue to fluctuate. This afternoon, the price of a barrel of Brent crude was reported at $78.32.
In the American WTI market, a barrel of crude oil is priced at $73.66. These rising prices follow a period when crude oil had dropped to around $65 per barrel.
The continuous price volatility in the global oil market, driven by an uncertain environment, has created economic pressure for many countries. Sri Lanka’s main suppliers of refined petroleum are Singapore, Malaysia, South Korea, and India. Rising transportation costs when importing oil from Singapore and Malaysia have also become a challenge.
The Singapore Platts index, which Sri Lanka uses as a key benchmark for determining oil purchase prices, has shown significant fluctuations over the past six months. Although prices in June and July recorded the lowest levels for the year, they still reflect a 5% increase compared to last year.
Global oil price increases—driven by factors such as supply chain disruptions, higher transport costs, and rising insurance premiums—have pushed current oil prices to elevated levels. A large portion of this impact is currently being absorbed through the Rs. 57 billion subsidy provided by the Sri Lankan government.
Based on price alignment, a litre of fuel should roughly cost around Rs. 750, but at present, Octane 92 petrol is sold at Rs. 414 per litre, and Lanka Auto Diesel at Rs. 382 per litre. The government’s ongoing subsidy programme is scheduled to end in September.