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

Fuel imports account for nearly 20% of Sri Lanka’s total import bill on average, according to the Central Bank.

Despite a rise in import volumes in 2025, total fuel expenditure declined from $4.4 billion in 2024 to $4 billion in 2025, mainly due to lower global prices. The average price of crude oil dropped from $84.7 per barrel in 2024 to $73.2 in 2025.

Sri Lanka also continued its cost-reflective fuel pricing mechanism in 2025, resulting in reductions in retail prices of Petrol 92-Octane, auto diesel, and kerosene by the end of the year.

However, fuel consumption increased by 7.4% in 2025 amid improved economic activity. In contrast, fuel prices were sharply revised upward in March 2026, outside the usual pricing mechanism, due to heightened geopolitical pressures linked to Middle East conflicts.