Sri Lanka’s fuel import bill expected to rise sharply in 2026 – CBSL forecast

The Central Bank of Sri Lanka has projected a significant increase in the country’s fuel import expenditure in 2026, citing geopolitical tensions in the Middle East and continued volatility in global oil markets as key contributing factors.

According to the Central Bank, fuel imports account for a substantial portion of Sri Lanka’s total import bill, averaging nearly 20% over the past decade.

Despite an increase in the volume of crude oil and refined petroleum imports in 2025, total expenditure declined from USD 4.4 billion in 2024 to USD 4 billion in 2025. The reduction was primarily driven by lower international prices of crude oil, refined petroleum products, and coal.

The average import price of crude oil also fell during the period, dropping from USD 84.7 per barrel in 2024 to USD 73.2 per barrel in 2025, reflecting fluctuations in global energy markets.

Meanwhile, Sri Lanka continued implementing a cost-reflective fuel pricing mechanism throughout 2025, allowing domestic fuel prices to adjust in line with international market trends. As a result, retail prices of Petrol 92-Octane, auto diesel, and kerosene oil declined by Rs. 15, Rs. 9, and Rs. 8 respectively by the end of 2025, compared to the previous year.

Fuel consumption also recorded growth, with petroleum product sales increasing by 7.4% during 2025, supported by improved domestic economic activity.

However, in March 2026, fuel prices were significantly revised upward outside the regular pricing mechanism, following heightened geopolitical pressures stemming from conflicts in the Middle East.