Sri Lanka raises gasoline costs by 25% as conflict bites

Sri Lanka raised gasoline costs by 25% on Sunday (March 22, 2026), the second improve in two weeks, because the nation ready for extra affect from the conflict in West Asia.

Common petrol was elevated to 398 rupees ($1.30) per litre, up from 317 rupees, whereas diesel, the gasoline generally used for public transport, rose by 79 rupees to 382.

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Final week, the federal government ordered an 8% improve in retail gasoline costs and launched rationing to restrict consumption.

“We hope to realize a 15% to twenty% discount in gasoline consumption with the newest improve,” an official on the Ceylon Petroleum Company mentioned.

He mentioned President Anura Kumara Dissanayake instructed them final week that the nation should put together for a chronic battle in West Asia that would have an effect on the island’s vitality provides.

The president ordered a four-day working week from final Wednesday (March 18, 2026) and requested employers to reintroduce work-from-home preparations the place doable.

The Strait of Hormuz, a key waterway by way of which some 20% of worldwide oil exports cross in peacetime, has been successfully closed by Iran in retaliation over the US and Israeli conflict in opposition to it, now coming into its fourth week.

Sri Lanka imports all of its oil and likewise buys coal for electrical energy era.

Sri Lanka buys refined petroleum merchandise from Singapore, Malaysia and South Korea, whereas crude oil for its Iran-built refinery is sourced from West Asia.

The federal government has warned that the preventing in West Asia, and a chronic conflict, might critically undermine its efforts to emerge from the financial meltdown of 2022.

Sri Lanka defaulted on its $46 billion overseas debt in 2022 after the nation ran out of overseas alternate. Since then, Colombo has secured a $2.9 billion IMF bailout.