Abstract:
Pricing of auto-fuel (petrol and diesel) has been a subject of debate among policy makers,
administrators, politicians and multilateral agencies in Sri Lanka. Auto fuel pricing policies
adopted by successive governments over the past four decades have been influenced by welfare
oriented political economy considerations rather than market factors and environmental
considerations. This has led to significant changes in the structure of vehicle population, fuel
consumption patterns and vehicular emission levels. This paper deals with these issues with
special emphasis on distributional and environmental implications of auto-fuel pricing.
