Sri Lanka introduces fuel subsidies for economic relief amid West Asia war

Sri Lankan President Anura Kumara Dissanayake on Tuesday (April 7, 2026) announced an economic relief package aimed at minimising the impact of the West Asia conflict.

Speaking at the parliament, Mr. Dissanayake said that India has agreed to provide the island nation with petrol and diesel. “As a government, we have to respond to the difficulties faced by the people.”

“We have focused on four areas: fuel, energy, gas and fertiliser,” the President, who is also the finance minister, said.

“We will grant a concession of LKR (Sri Lankan Rupees) 100 per litre for diesel and LKR 20 per litre for petrol,” Mr. Dissanayake said, adding that it will cost the government LKR 20 billion per month.

He said the government had launched a flurry of diplomatic activity to ensure Sri Lanka’s energy sustainability.

“I spoke to Prime Minister Modi. He has agreed to provide us with petrol and diesel,” Mr. Dissanayake said, adding that talks have commenced with Russia to obtain gas, coal, fuel and fertiliser.

Sri Lanka’s forex reserves have reached nearly $7 billion, the president said. “Central Bank was able to buy $700 million dollars from the market, so it is a good situation,” he added.

Since the U.S.-Israeli military action against Iran began on February 28, Sri Lanka raised retail fuel prices three times in March. The last revision saw prices rising by over 25%.

The government also introduced a four-day work week to conserve energy, with guidelines issued to cut down usage.

Sri Lanka looks to India-backed Trincomalee project amid energy crisis

However, it was announced that the five-day work week would return from Wednesday with the cancellation of the mid-week holiday.

On March 28, India sent a shipment of 38,000 MT of fuel, comprising 20,000 MT of diesel and 18,000 MT of petrol, to Colombo as an emergency support through the local operation of Indian Oil Corporation (IOC), Lanka IOC (LIOC).

The fuel shipment was a result of a telephone conversation held on March 24 between Mr. Dissanayake and Prime Minister Modi.