Colombo 22 march 2026 (RNS):
The impact of the West Asia conflict is now being felt sharply in Sri Lanka, where fuel prices have been increased by nearly 25 percent. This marks the second hike within a week. Disruptions in global oil supply due to tensions around the Strait of Hormuz have triggered fears of rising inflation and a possible return to conditions similar to the 2022 economic crisis.
The ongoing conflict in West Asia has begun to directly affect Sri Lanka’s economy. Amid volatility in global oil markets, the government has imposed a steep increase in fuel prices. The move comes at a time when the crisis around the Strait of Hormuz has intensified, affecting a key global oil transit route.
The revised prices came into effect at midnight. This is the second increase in a week and the third since March 1. Petrol, diesel, and kerosene have all become significantly more expensive, impacting households, transport, and industries alike.
How much have prices increased?
- Auto diesel: Increased from 303 to 382 LKR per litre (up by 79 LKR)
- Super diesel: Increased from 353 to 443 LKR per litre (up by 90 LKR)
- Petrol (92 octane): Increased from 317 to 398 LKR per litre (up by 81 LKR)
- Petrol (95 octane): Increased from 365 to 455 LKR per litre (up by 90 LKR)
- Kerosene: Increased from 195 to 255 LKR per litre (up by 60 LKR)
Why have prices increased?
The primary reason behind the hike is escalating tensions in West Asia. Following attacks involving the United States and Israel, Iran’s retaliatory actions have heightened instability across the Gulf region. The Strait of Hormuz, through which a significant portion of the world’s oil supply passes, has been impacted, leading to supply disruptions and rising global prices.
Impact on public and transport sector
The transport sector has been the worst hit. Private bus operators have warned that up to 90 percent of buses may go off the roads if fares are not increased. They have demanded at least a 15 percent hike in fares. Auto-rickshaw and three-wheeler drivers are also being forced to raise fares, adding to the burden on common citizens. The government maintains that it is still providing substantial subsidies on fuel and bearing heavy monthly costs. Officials argue that without the price hike, the country would face an additional burden of billions of dollars. However, experts caution that inflation could rise by 5 to 8 percent, raising concerns that Sri Lanka may once again drift toward an economic crisis similar to that of 2022.
