Share your email and we'll share the latest news
Exclusive economic intelligence, political and business coverage
Tuesday, September 22 2026
Tuesday, September 22 2026
MONETABRIEF – Sri Lanka is planning to resume fuel subsidies in October to control retail prices President Anura Kumara Dissanayake said as intensifying war in the Middle East drove up crude and diesel prices in particular.
"We should raise according to international prices in October," President Dissanayake told a rally on Sunday.
"But we hope to control it by giving a subsidy."
Sri Lanka's fuel prices announced by state-run Ceylon Petroleum Corporation is generally followed by other distributors.
There have been intermittent outages of diesel in petrol outlets in private distributor networks.
Private distributors have complained that they are losing around 120 rupees litre on diesel, Energy Minister Aruna Karunathilake said.
The CPC was losing around 60 rupees on diesel as it had refinery profits (crack margin). Crude is also taxed at a lower rate than refined products at the point of import.
Sri Lanka's central bank busted the rupee from 309 to 340 to the US dollar by dishonoring its note issue which was bloated to cut rates, as oi prices first rose in 2026 amplifying the effect on the Iran war on the people and budgets.
In 2015/16 the central bank busted the rupee by dishonoring notes created through liquidity injections to cut rates as oil prices fell steeply.
Sri Lanka's central bank started creating balance of payments trouble from February 1952 after printing money to suppress rates (at the time macro-economists had not invented the so-called rate cut), dooming the country to tax hikes, import and exchange controls.
Central banks started to escape accountability for monetary depreciation in the early 1980s after the International Monetary Funds second amendment to its Articles, shattering budgets, and triggering Latin America defaults.
Before the age-of-inflation and macro-economic 'policy support', chipping away at the value of the currency was considered a treasonous crime that was rewarded with capital punishment. (Colombo/Sept21/2026)
| 3 month bill | 9.22% | 22bp ▼ |
| 12-m bill | 9.91% | 10bp ▼ |
| Gold (Ounce) | $4602 | - - |
Comments
Be the first person to comment and join the debate