The price of petrol and diesel increased by 20% last Monday. Petrol is now at Rs 34,80 per litre and diesel at Rs 23,76 per litre. Two things have surprised the population. First, the rapidity with which this increase has come on top of the previous one. The second is the amount of the increase. The State Trading Corporation (STC) has set up scales of increase known as the Automatic Pricing mechanism (APM). According to the scale, the increase was to be up to a maximum of 15 %.

From the government’s perspective, this rise will be an opportunity for the STC to redress its financial situation, which had deteriorated over the last few months following the increases of the price of fuel on the world market. The losses of the STC on petrol until December 2005 were estimated at Rs 668 millions but, on all products, it was said to be around Rs 1,5 billion. Ranjit Soomarooah, general manager of the STC, states that these measures had to be taken to avoid a wider loss. He also adds that this rise could have been even higher than 20%.

But while the situation is slightly improving for the STC, the consumers see themselves as victims of those measures. It is obvious that, as from now, the population will be affected more than ever by the rise in the price of fuel. Reacting to this, a motorist said: “The situation is getting worse for us motorists.

For example, I now have to spend at least a quarter of my salary on fuel alone. Life was already getting too expensive and this latest increase only makes matters worse.”