COLOMBO -- Sri Lanka Thursday increased fuel prices by nearly six percent amid fears of war in Iraq, but said the government was planning relief measures to cushion the impact.

Government spokesman G. L. Peiris said the government was concerned that war in Iraq could have serious implications for Sri Lanka's economy. "It is a matter that constantly engages the attention of the government," Peiris said. "Despite the difficult economic circumstance we are facing right now, we want to ensure that some relief is given to our people."

State-run Ceylon Petroleum Corporation announced the sharp fuel increases from Thursday, blaming crude oil prices which had risen on the back of fears of war in Iraq.

Sri Lanka this week appointed a joint task force comprising diplomats and Labor Ministry officials to evacuate 170,000 of its nationals employed in Kuwait if war breaks out in neighboring Iraq.

Labor Welfare Minister Mahinda Yapa Abeywardena said the government plans to provide food and shelter to an estimated 160,000 to 170,000 Sri Lankans working in Kuwait.

The number of Sri Lankan migrant workers in the Middle East is estimated at about a million and their annual remittances amounting to more than a billion dollars are the largest single source of foreign exchange for the country.

Last month, Sri Lanka urged Iraq to co-operate with UN weapons inspections and called for diplomatic efforts to peacefully resolve the crisis given the "human, political and economic consequences" of war.

Sri Lanka which depends on Persian Gulf oil for most of its energy requirements has also urged motorists and other consumers to stock up on oil supplies to mitigate the effects of shortages in the event of war in Iraq. (AFP) CAPTION Gas station