President Anura Kumara Dissanayake has warned that Sri Lanka is facing an external economic shock due to the ongoing war in the Middle East, urging the public and businesses to respond collectively to manage its impact.
Key points from his remarks:
1. The President said the Middle East conflict has disrupted global supply chains, creating economic pressure on many countries including Sri Lanka.
2. He noted that global crude oil prices have increased by about 42% since early March, rising from around USD 70 to nearly USD 100 per barrel.
3. The increase in oil prices has created uncertainty in global markets and influenced consumer behaviour locally.
4. Diesel sales in Sri Lanka rose sharply from about 4,500 kilolitres on March 1 to around 10,500 kilolitres by March 3, reflecting public concern over fuel availability.
5. The President explained that unlike the 2022 crisis, which was caused by a shortage of US dollars, the current challenge is primarily a supply disruption due to the war.
6. He said the government has established an Economic Monitoring Committee and is in discussions with friendly nations to secure supply chains and ensure continued access to essential imports.
7. The President assured that the government can maintain fuel supply for about two months under current projections, but warned that prices may fluctuate depending on developments in the conflict.
Full Speech
There has been a long-standing relationship between this COYLE forum and myself personally. At that time, you presented me with a series of questions regarding our policies and the strategies we intended to follow. It has now been more than a year since we assumed power. If you had questions then, do you still have them today? If there were doubts regarding our economic policies, I believe those doubts have now been resolved. What remains now is to face the challenges before us successfully and transform our motherland into a victorious state. I believe that the discussion you are having now is about the measures we are taking to achieve that.
We all know that our country experienced a major collapse a few years ago. After an economic collapse, nothing remains intact; everything comes to a standstill. Therefore, we all have a bitter recent experience of how destructive the collapse of an economy can be to the social fabric. Accordingly, the first responsibility entrusted to us as a government was to restore confidence in the economy. In order to move an economy forward, people must believe in its momentum. Confidence in the economy must be built among businesspeople and industrialists.
Even when we assumed power, the country had already entered into an Extended Fund Facility programme with the International Monetary Fund. That programme introduced certain targets and parameters. Even aside from those parameters, there are several indicators that help build confidence in an economy. I believe that through these indicators we have achieved highly successful outcomes that exceed both the parameters linked to the IMF programme and the targets we ourselves expected.
Among these achievements are recording the lowest budget deficit in Sri Lanka’s history in 2025, bringing the current account balance into surplus, achieving government revenue of 17.2 per cent in 2025 after several decades and making 2025 the year with the highest foreign remittances received by Sri Lanka. Therefore, the country’s economy is now stable. However, what we need is a resilient economy. We must create an economy capable of withstanding both external and internal shocks. If an economy collapses in the face of such shocks, it cannot remain stable. Accordingly, we are now building an economy that can withstand such internal shocks.
However, at present we are facing an external shock. The war situation in the Middle East is disrupting the supply of goods and services. The world is interconnected through markets. In such an interconnected global system, any shock arising in one sector affects us as well. Therefore, the key question is how we withstand these external shocks.
At the beginning of March, a barrel of crude oil was priced at approximately USD 70. It has now risen to around USD 100, representing an increase of roughly 42%. Oil prices continue to fluctuate significantly, creating a climate of uncertainty worldwide. This situation has impacted all nations, generating economic pressures and in some cases, social strain. It is important to note that citizens are not to be blamed for these challenges. The consequences of fuel and gas shortages have been experienced directly by the population. In response, citizens have been lining up at fuel stations. Sales of diesel began with 4,500 litres on the first day of March and increased to 10,500 litres by 3 March.
Petrol sales initially rose from around 4,000 kilolitres to approximately 9,000 kilolitres, but have now fallen back below 6,000 kilo litres. Therefore, it is important to emphasise that no individual can remain safe or unaffected in isolation. If everyone collectively takes responsibility and acts together to address this challenge, it is only through such shared effort that we can overcome it for the benefit of all.
These external shocks are exerting a tangible impact on us, which has necessitated an increase in fuel prices. Approximately 47% of our fuel market is controlled by external entities, which makes it essential to establish trust with them. At the same time, it is important to bring fuel availability back to normal consumption levels. The recommendation is that, through collective effort, we should work together to reduce further for the benefit of all.
The 2022 crisis arose not because global supply routes were disrupted or fuel reserves were attacked, but due to a shortage of dollars to procure fuel. Today, however, that problem no longer exists, as we now have foreign reserves of USD 7.2 billion. Consequently, any future crisis would only occur as a result of disruptions in supply routes. In anticipation of such risks, discussions are underway with friendly nations to secure alternative channels. It is the government’s responsibility to ensure an uninterrupted supply of energy. Any disruption would cause the significant economic gains we have achieved in a short period to stall. Therefore, the government’s comprehensive plan focuses on guaranteeing continuous energy supply.
Continuous energy supply can now be assured. However, it is only possible to forecast and guarantee this reliably for a maximum period of two months. If the conflict persists beyond this two-month window, predictions based on current assessments will no longer hold.
This is an era in which technology and science have given unprecedented power to warfare. As a result, it is impossible to predict the impact of such advanced military operations over the long term. Short-term forecasts are possible, but if the conflict continues beyond that period, no one can reliably predict the outcomes. Therefore, assurance can be provided that energy supply will be maintained over the next two months, however, prices may fluctuate. I am neither an owner of an oil well nor a representative of any oil company. These actions are not undertaken for personal profit. However, as a government, there is a responsibility to ensure an uninterrupted supply of energy.
All necessary measures have been put in place to manage internal pressures effectively. We have been able to address these domestic challenges, but confronting external shocks will require additional time. We are currently navigating a path of recovery and progress, which naturally entails encountering certain pressures. However, these challenges are being carefully managed and efforts are on-going to mitigate their impact. It is essential that everyone collectively faces these pressures, acting with consideration not only for oneself but for the welfare of the entire community. Consequently, some adjustment to consumption patterns is necessary. Unlike stable economies, nations facing global crises cannot rely solely on habitual consumption practices. In times of crisis, restraint and prudent economic behaviour are indispensable. I urge everyone to adopt a degree of moderation and participate in careful economic practices. By doing so collectively, we can successfully navigate this crisis and emerge stronger.
A long-term plan has also been developed, with digitalisation forming a central component. Historically, our nation has missed significant opportunities. The world continuously generates new economic prospects through advancements in science and technology. Over the past century, we have witnessed remarkable innovations across various scientific and technological fields globally. However, parallel to this progress, our nation has struggled to keep pace with technological and scientific development. As a result, we have not been able to advance alongside the rest of the world. In the current era, digitalisation, artificial intelligence and data centres represent key technological platforms that create new economic opportunities. It is therefore essential that we capitalise on these opportunities. As a government, every effort is being made to harness advancements in science and technology to rebuild and strengthen the nation’s economy in this new era.
Digitalisation must be pursued on a large scale and significant effort is being invested to achieve this. Under the current budget, approximately LKR 6.5 billion has been allocated for digital initiatives. It is anticipated that, before the end of this year, digital identity cards will be issued. This will allow for the minimisation of inefficiencies and delays within the state mechanism, enhancing overall administrative effectiveness.
Work is currently underway to transform the entire state apparatus. In this endeavour, the significant driving force of the nation’s economy is in your hands. Expand your business twofold or threefold. The role of the government is to provide all the necessary services and support to enable this growth. Every individual is encouraged to grow their business by 100% over the next two to three years, thereby becoming a key contributor to the national economy. (Newswire)
