(Excerpted from the “Sunday Times”Political Column of 15th March 2026)

As the war in West Asia widened into its second week, the shocks came thick and fast for many countries, with Sri Lanka no exception. The first blow for the public came at midnight on Monday (9), with a substantial increase in fuel prices across the board.

The very next day, state-owned Litro Gas, which had been putting off a price hike even as its private sector competitor Laugfs Gas had been steadily increasing prices, announced a significant hike of its own, with the price of the widely used 12.5kg domestic LPG gas cylinder going up by Rs. 300. The gas price hike added further misery to consumers owing to the prevailing shortage of both Litro and Laugfs gas.

Before the war began on February 28, the price of a barrel of crude oil was hovering between USD 60 and 70 a barrel. Given the speed at which the war had intensified and how the price of oil had climbed rapidly to over USD 100 a barrel by the middle of this week, a local price hike was inevitable.

Explaining the sudden, unscheduled price hike, Ceylon Petroleum Corporation (CPC) Chairman Janaka Rajakaruna noted that the price of diesel on the world market had increased by nearly 100% compared to prices on February 27, the day before the US and Israel launched their attacks on Iran.

The world price of Octane 92 petrol had shot up by 75%, while the price of crude oil had increased by 37%. The CPC chairman also held the public partially responsible for forcing the CPC’s hand to increase prices early through panic buying as soon as the war started. The sudden surge in fuel consumption meant that fuel stocks which were meant to last till April had depleted, forcing the CPC to purchase fuel from new shipments at much higher prices. He appealed to the public to minimise fuel consumption and limit unnecessary travel.

Aside from making public appeals to conserve fuel, the National People’s Power (NPP) government has so far avoided taking stronger measures. This is in marked contrast to some of Sri Lanka’s neighbours in South Asia. Bangladesh, for example, started rationing fuel sales last week in an effort to halt panic buying and closed all universities to conserve energy.

The Bangladesh government also deployed the military at major oil depots and police around fuel stations. In neighbouring Pakistan, the government this week directed schools to close for two weeks and for universities to shift classes online. Pakistan Prime Minister Shehbaz Sharif also announced that fuel allocations for government vehicles would be cut in half for two months, with exceptions for ambulances and public buses.

He added that 50% of government staff would work from home to save fuel. In Myanmar, the ruling military junta introduced fuel rationing, introducing an ‘even-odd’ licensing scheme, with even-numbered plates only being allowed to drive on even dates and odd-numbered plates on odd dates.

Electric vehicles and electric motorcycles, however, have been exempted. In Southeast Asia, meanwhile, the Philippines has moved to a four-day week as part of efforts to curb fuel consumption, while Vietnam has requested businesses to encourage work-from-home when possible to reduce the need to travel.

No such measures have been announced by the NPP government so far. As the war drags on, however, the government is facing growing calls to take tougher measures. In particular, it is under immense pressure to reintroduce the QR code-based fuel rationing system implemented during the economic crisis. The government has so far maintained that there is no immediate need to introduce the QR system.

Cabinet Spokesman Nalinda Jayatissa told this week’s Cabinet media briefing that the QR system only served to eliminate long queues and panic buying. The available data shows that implementing the QR system did not reduce fuel consumption, he told journalists.

Some in the opposition, though, insist that it is ego that is preventing the NPP from immediately introducing the QR system, as its introduction would serve as an admission that previous governments, which the NPP has been criticising as having not done anything useful for the country, had actually got something right. What’s worse, it would mean that the NPP too would have to rely on it.

The price hikes in fuel and cooking gas mean that the price of many other goods and services would go up too. Prices of rice packets, kottu, milk and plain tea as well as short eats have already gone up. School transport fees have also been increased by 5%. Private bus owners and three-wheeler operators are also demanding fare hikes in line with increased fuel prices, with bus owners warning they may resort to trade union action if their demands are not met.

The bottom line in all this is that the cost of living has substantially gone up for ordinary Sri Lankans since the start of the war.
Public anger owing to the rising prices and shortages in items such as cooking gas has been directed not just against the government but increasingly at President Anura Kumara Dissanayake himself.

The latter is a more recent trend and one that should worry both the NPP and the President. While the NPP government has copped plenty of public criticism over the past year, President Dissanayake’s popularity has largely been unaffected. There have been numerous occasions in the government’s tenure so far where the President has had to come before Parliament and use his considerable oratory skills and personal charisma to effect damage control measures whenever the government has found itself in difficult situations

The trend has become so pronounced that it has developed into a running joke among opposition MPs as to which crisis would compel the government to put forward the President next to restore some measure of public faith. Yet, the West Asian crisis, coming just three months after the country had been battered by Cyclone Ditwah, is now testing the President’s popularity as well.

President Dissanayake hinted at the personal criticism being directed his way when he addressed the Chamber of Lankan Entrepreneurs (COYLE) 2026 Annual General Meeting on Tuesday (10). In a wide-ranging speech, he spoke of the challenges posed to Sri Lanka by the West Asian crisis. He noted that the war is disrupting the supply of goods and services.

“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 even though 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,” President Dissanayake emphasised.

The President has now publicly assured that the energy supply will be maintained over the next two months, whatever challenges may come. The Iran war, however, continues to be unpredictable, mainly due to the rapidly changing mindset of US President Donald Trump. The famously maverick US President continues to give widely contrasting signals about when the US might bring about an end to the war.
How all these new developments could affect world oil prices, if there will be further supply chain disruptions, and whether the war will become even more intense than it already is, are all unknowns at this point.

Courtesy:Sunday Times