The finance ministry said it had decided to raise the price of gasoline by 4 percent to 155 Sri Lankan rupees ($0.91) a litre and kept diesel steady at 123 rupees at state-run Ceylon Petroleum Corp (CPC) during a review meeting on Wednesday.

"The government in order to reduce the adverse effect on the people especially the transport and fishery sector has decided not to increase the price of auto diesel, though it needs to be increased by 11 rupees a liter under the fuel price formula," M. Ali Hassen, director of information at the ministry, said.

Lanka IOC, the only other fuel retailer in Sri Lanka and which can independently decide its pump prices, also raised its prices by a similar amount and increased auto diesel by 4.9 percent to 129 rupees.

Both CPC and Lanka IOC, the only other fuel retailer in Sri Lanka and a subsidiary of Indian Oil Corp , raised prices in May and July to prevent losses.

CPC had been under pressure to hike prices after incurring a loss of 9.9 billion rupees ($64 million) in the first two months of the year because of rising oil prices.

The government has been revising fuel prices according to a price formula once a month since May.

The rupee has weakened 1.18 percent this month against the dollar, after a 4.7 percent drop in September. It has declined 11.47 percent so far this year, its sharpest fall since 2001.

The government cut petrol prices in January 2015 after President Maithripala Sirisena was elected and did not increase prices until May this year, fearing a voter backlash.

Under pressure from the International Monetary Fund to boost revenue, Sri Lanka increased excise duty on diesel by 10 rupees to 13 rupees per litre from August last year but asked fuel retailers not to pass on the rise until this year.