Sri Lanka Raises Fuel Prices Again Amid Middle East War Fears

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Colombo: Sri Lanka has increased fuel prices by up to 25 per cent, marking the second hike in two weeks as authorities brace for the impact of escalating tensions in the Middle East on energy supplies.

The price of regular petrol was raised to Rs 398 per litre from Rs 317, while diesel—widely used for public transport—rose by Rs 79 to Rs 382 per litre.

The latest increase follows an earlier eight per cent hike and the introduction of fuel rationing measures aimed at curbing consumption. Officials said the move is expected to reduce fuel usage by 15 to 20 per cent.

The decision comes amid growing concerns over disruptions to global oil supplies, particularly through the Strait of Hormuz, a critical route for around 20 per cent of global oil trade.

President Anura Kumara Dissanayake has warned of a prolonged conflict in the Middle East and urged the country to prepare for potential supply shocks. As part of precautionary measures, the government has introduced a four-day working week and encouraged work-from-home arrangements where possible.

Sri Lanka, which relies entirely on imported fuel, sources refined petroleum from countries including Singapore, Malaysia and South Korea, while crude oil is largely procured from the Middle East.

The government has warned that sustained conflict could derail its fragile economic recovery following the 2022 financial crisis, when the country defaulted on $46 billion in foreign debt. Since then, Colombo has been working to stabilise its economy under a $2.9 billion bailout programme from the International Monetary Fund.