Sri Lanka spent approximately US$3,168 million on fuel imports in the first half of 2026, an increase of 58.8% year-on-year, according to the Central Bank of Sri Lanka’s External Sector Performance report for June.

The cumulative merchandise trade deficit widened to US$5.5 billion over the six months, against US$3.3 billion in the same period of 2025. The external current account recorded a deficit of US$149 million in June — a third consecutive monthly shortfall — leaving a cumulative first-half deficit of US$245 million, reversing the surplus posted a year earlier.

Refined products, not crude

The composition of the bill is what has drawn attention. Hiru News, analysing the bulletin, reported that refined petroleum imports jumped almost 79% to more than US$2.5 billion while crude oil imports grew just 7.5%. Refined products now account for around 80% of the fuel bill, up from roughly 71% a year ago. In June alone, Hiru said, crude imports fell 16% while refined imports rose 59%.

Buying finished fuel rather than refining crude domestically means paying refining margins to overseas suppliers. Hiru, citing analysts, described it as the most expensive way to meet the country’s energy needs.

Monthly pressure easing

The Central Bank noted that although fuel expenditure was up 40.2% year-on-year in June, the monthly bill has been moderating — from US$886 million in April to US$536 million in May and US$465 million in June.

Vehicle imports told a similar story. Spending fell 27.1% month-on-month to US$182 million in June, and the first-half total of US$1,254 million was below the US$1,572 million recorded in the second half of 2025 — though Hiru noted personal vehicle imports have nearly tripled year-on-year to over US$970 million since import liberalisation.

Gross official reserves stood at US$6.5 billion at end-June. The rupee had depreciated 7.8% against the dollar year-to-date by end-July, which the Central Bank attributed to pressures arising from the conflict in the Middle East, while noting the pace has since moderated. Workers’ remittances rose 23.2% to US$4.6 billion, remaining the economy’s main cushion, even as tourism earnings fell 11.8% to US$1,511 million.

Retail fuel prices were held unchanged for August.

Sources: Central Bank of Sri Lanka; Hiru News.