Sri Lanka announces fuel subsidy amid global oil crisis

Sri Lankan authorities have announced a fuel subsidy of Rs. 100 per litre for diesel and Rs. 20 per litre for petrol for the next three months amid rising global oil prices linked to the Middle East conflict.

Chairman of the Ceylon Petroleum Corporation (CEYPETCO) and Ceylon Petroleum Storage Terminals Ltd. (CPSTL) D.A. Rajakaruna said that Rs. 57 billion has been allocated for the subsidy programme.

Rajakaruna stated that fuel prices are expected to remain high due to the ongoing war situation in the Middle East and noted that Sri Lanka continues to face heavy losses on fuel sales.

According to him, the cost of importing and distributing one litre of diesel is around Rs. 750, while it is currently being sold at Rs. 392, resulting in a loss of about Rs. 358 per litre.

He further stated that the increase in foreign exchange spent on fuel imports directly impacts the value of the US dollar in Sri Lanka. Sri Lanka had spent USD 522 million on fuel imports in April, 2026 while the amount dropped to USD 324 million in May.

Rajakaruna urged the public to limit fuel consumption as much as possible in order to protect the country’s foreign exchange reserves and exchange rate stability.

He also assured that necessary measures have already been taken to maintain an uninterrupted fuel supply throughout the rest of the year unless an unexpected emergency situation arises.

According to the CPC Chairman, refinery operations are continuing without interruption, while arrangements have been made to secure sufficient refined fuel products, including petrol and diesel, until August.

However, he noted that high fuel prices in the global market continue to remain a major challenge.

Rajakaruna also stated that there are future plans to remove the current odd-even fuel distribution system, although the QR code based fuel rationing system will continue.

He added that plans are underway to provide direct subsidies for kerosene and diesel required by farmers and fishermen, with efforts being made to develop the system into an online payment platform.

Commenting on electricity consumption, Rajakaruna said an uninterrupted power supply has been ensured, although around 1,000 tonnes of diesel are being used daily for electricity generation.

He also requested the public to reduce electricity consumption during night hours as much as possible and said relief measures will be provided during the upcoming Vesak week.

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