Sri Lanka fuel subsidies: President Anura Kumara Dissanayake announced on April 7, 2026, a comprehensive economic relief package to mitigate the adverse effects of the ongoing West Asia conflict. Speaking in parliament, he revealed that India has agreed to supply petrol and diesel to Sri Lanka, a significant move to alleviate the nation’s energy crisis.
The President, who also serves as the finance minister, detailed the focus on four critical areas: fuel, energy, gas, and fertiliser. He declared a subsidy of LKR 100 per litre for diesel and LKR 20 per litre for petrol, a measure expected to cost the government LKR 20 billion each month.
To ensure energy sustainability, the government has initiated extensive diplomatic efforts. President Dissanayake confirmed discussions with Indian Prime Minister Narendra Modi, resulting in India’s commitment to provide fuel. Talks with Russia are also underway to secure gas, coal, fuel, and fertiliser.
Sri Lanka’s foreign exchange reserves have reached nearly $7 billion, bolstered by the Central Bank’s acquisition of $700 million from the market. This financial stability comes after a series of fuel price hikes in March, following the U.S.-Israeli military action against Iran that began on February 28.
Despite the energy crisis, the government has decided to revert to a five-day work week, ending the temporary four-day schedule. The recent shipment of 38,000 MT of fuel from India underscores the strategic partnership between the two nations, a result of direct communication between President Dissanayake and Prime Minister Modi.
Published in SouthAsianDesk, April 8, 2026
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