The government is trying to keep diesel prices unchanged at the next fuel price revision, expected on Wednesday, Energy Minister Anura Karunathilaka has said — while acknowledging that holding the price would mean paying a subsidy instead.
“We are trying to keep at least the diesel prices steady. The current global prices are around US$110 per barrel. Otherwise we will have to provide a subsidy,” Karunathilaka said on Saturday, on the sidelines of a media briefing, EconomyNext reported.
The qualifier matters. “At least the diesel prices” leaves petrol unaddressed, and the minister gave no commitment on it.
The pressure to raise prices
Sri Lanka has committed to market-reflective fuel pricing under its International Monetary Fund programme, and EconomyNext reported that analysts expect the country will be forced to raise prices at the coming revision because of that commitment.
Pump prices have already moved sharply this year. Fuel prices were raised by more than 50% after the Middle Eastern escalation that began on 28 February 2026, and have since been reduced twice.
What a freeze costs
Holding diesel means absorbing the difference. President Anura Kumara Dissanayake has announced a Rs. 41 billion fuel subsidy covering the next three months, announced at a political campaign meeting.
The previous round gives a sense of scale: the government spent around Rs. 57 billion on fuel subsidies in the three months to the end of June, absorbing Rs. 100 per litre on diesel and Rs. 20 per litre on petrol.
Two figures that need separating
EconomyNext’s report states that global oil prices “have risen about US$100 per barrel” while quoting the minister putting current prices “around US$110 per barrel.” Read as a level rather than an increase, the two are consistent; read as an increase, they are not. We reproduce both as published.
The minister’s US$110 figure also does not directly answer the complaint the industry has been making. Lanka IOC’s managing director K. Raghu told the Daily Mirror a day earlier that crude was around US$105 but that refined diesel was trading near US$170 a barrel on the Singapore benchmark, and that LIOC was losing about Rs. 140 a litre on diesel. Crude and refined product are separately priced, and it is the refined figure that determines an importer’s cost — so a crude quotation near US$110 is not evidence that diesel can be held without a subsidy.
The wider pricing question
The government has also been weighing whether to let private fuel firms set their own prices within a band, a change that would shift some of this decision away from monthly ministerial announcements. Private distributors — LIOC, RM Parks and Sinopec — have asked for either a retail revision or a cost-plus mechanism tracking actual import costs.
Not reported
EconomyNext did not give the exact date of the revision beyond “by Wednesday this week,” current pump prices, the expected size of any diesel subsidy, or whether petrol prices will rise. No other verified newsroom had carried the minister’s diesel remarks at the time of writing.
