Inquilab News

Sri Lanka has announced a fuel subsidy programme to provide economic relief as the ongoing West Asia conflict continues to impact global energy supplies.

President Anura Kumara Dissanayake on Tuesday April 7, 2026 said the government would reduce fuel prices by granting a concession of LKR 100 per litre for diesel and LKR 20 per litre for petrol. The move is expected to cost the government around LKR 20 billion per month.

Addressing Parliament, Dissanayake said the government is focusing on four key areas fuel, energy, gas, and fertiliser to manage the economic strain. He emphasised the need to respond to public hardship amid rising fuel costs.

The President also confirmed that India has agreed to supply petrol and diesel to the island nation following discussions with Prime Minister Narendra Modi. Additionally, talks have begun with Russia to secure gas, coal, fuel, and fertiliser.

Sri Lanka has intensified diplomatic efforts to ensure energy security, as global supply disruptions continue. The country’s foreign exchange reserves have improved to nearly $7 billion, with the Central Bank recently purchasing $700 million from the market.

The economic measures come after multiple fuel price hikes in March, triggered by rising global oil prices following U.S.-Israeli military action against Iran. The last increase saw retail prices surge by over 25%.

To conserve energy, the government had earlier introduced a four-day work week, though it has now decided to return to a five-day schedule. Additional guidelines have also been issued to reduce energy consumption.

India had previously provided emergency fuel support, including a shipment of 38,000 metric tonnes to Colombo through Indian Oil Corporation’s local unit, highlighting close cooperation between the two countries during the crisis.