News & market updates

The Ceylon Petroleum Corporation revised domestic fuel prices on March 1 and again on March 9 after the Petroleum Storage Terminals Company said incoming shipment costs rose sharply; authorities say stocks cover about 30 days and the hike aims to avoid a larger adjustment later.

Falling global oil prices and stronger external metrics prompted a relief rally in Sri Lanka’s secondary government bond market, driving yields lower across the curve (e.g., 01.08.26 at 8.30%, 15.02.28 at 9.10%). Ahead of a Rs.130bn T‑bill auction, money‑market liquidity stayed ample (net surplus Rs.335.36bn) and USD/LKR closed around Rs.310.90/311.00.

Fitch warned the Iran conflict could raise credit risks for emerging markets such as Sri Lanka by raising energy prices and disrupting remittances, exchange rates, fiscal subsidies and access to international finance.

The Sri Lanka Export Development Board has opened applications for Sri Lanka Expo 2026 (18–21 June at BMICH), offering 650 booths and opportunities to meet over 1,500 global buyers; applications close 31 March 2026. Sectors covered include industrial and agro-industrial products and services such as ICT, tourism, renewable energy and healthcare.

The Cabinet approved a 'Committee on Economic Surveillance' chaired by Dr. Anil Jayantha Fernando to monitor and assess potential economic impacts on Sri Lanka from the Middle East conflict. The committee will review sector risks and submit policy recommendations to the Cabinet.

UN Global Compact Network Sri Lanka launched a Country-Level Environmental and Supply Chain Sustainability Working Group strategy and held January 2026 kick-off sessions to mobilise 70+ companies across five thematic working groups. The initiative focuses on climate mitigation/adaptation, water and ocean stewardship, and supplier capacity building to advance sustainability and regulatory-aligned disclosure.

Oil prices fell more than 6% after U.S. President Donald Trump predicted de-escalation in the Middle East: Brent fell $6.51 (6.6%) to $92.45/bbl and WTI dropped $6.12 (6.5%) to $88.65. Markets remain volatile after recent supply cuts and talk of sanctions relief and reserve releases.

IMF Director Kristalina Georgieva warned a prolonged war could raise global energy prices and lift inflation, testing economic resilience and placing new demands on policymakers.

Government raised retail fuel prices across the board: Petrol Octane 92 +Rs24 to Rs317, Octane 95 +Rs25 to Rs365, Auto Diesel +Rs22 to Rs303, Super Diesel +Rs24 to Rs353, kerosene +Rs13 to Rs195. Lanka IOC mirrored CEYPETCO's increases.

Brent crude topped $119/barrel (trading around $110) after US-Israel strikes on Iran, a ~50% rise since Feb 28 that sent global stocks lower; gold benchmarks climbed above $5,400/oz, lifting the metal's estimated market value to $30–35 trillion.

The ASPI plunged 3.51% to 21,904.14 as panic selling and a >25% surge in crude to about $115/bbl on Middle East conflict hit the CSE; banking and blue-chip stocks (Commercial Bank, HNB, JKH, Sampath, C T Holdings) led declines while Lanka IOC rose.

Transparency International Sri Lanka has filed RTI requests with the Lanka Coal Company, Energy Ministry, Ports Ministry and other bodies seeking certified documents on coal procurement and quality for the Norochcholai (Lakvijaya) power plant amid allegations of tender irregularities and inferior coal shipments.

Frontier Research warned that a sharp rise in global oil prices from the Middle East conflict could raise Sri Lanka's petroleum import costs and push up inflation via higher transport and electricity prices. The firm also flagged risks to tourism from rerouted flights and higher travel costs, which could weaken external sector earnings.

The Ceylon Electricity Board has ceased operations and its listed Rs.20 billion debenture liability (9.35% coupon, maturing 15 April 2026) has been transferred to Electricity Distribution Lanka Ltd. under the Electricity Act unbundling that split CEB into six new entities.

Secondary bond yields rose sharply after Brent crude jumped over 15% above $100/bbl, with key maturities trading in ranges from 8.60% to 11.00% and a Rs.130bn Treasury bond auction scheduled (1 Mar 2030, 15 Jun 2034, 15 Aug 2036). Net liquidity was Rs.334.72bn and USD/LKR closed at 311.60/311.90.

Sri Lanka Export Development Board has opened applications for Sri Lanka Expo 2026, a four-day international trade exhibition from 18–21 June 2026 at BMICH offering 650 booths and access to over 1,500 global buyers; application deadline is 31 March 2026.

Brent crude jumped past $110/bbl in March 2026, prompting Sri Lanka to raise diesel 7.8% and petrol 10%, which widens the import bill, pressures reserves and has devalued the rupee. The shock raises energy and transport costs, risking higher inflation and strain on fuel importers and the power sector.

The BOI will host the 'Invest in Sri Lanka' Forum on 30 March to showcase improving macroeconomic stability and attract global investors to opportunities in renewable energy, tourism, technology and infrastructure.

Sri Lanka's rupee weakened to 311.60/90 per US dollar and government bond yields rose after global energy prices increased; selected yields included the 15.10.2029 at 9.60–9.70% and the 01.06.2033 at 10.60–10.70%.

Colombo's ASPI plunged 797.77 points (3.51%) to 21,904.14 as global oil prices surged over 20% after West Asia supply shocks. Major negative contributors were Commercial Bank, John Keells, Hatton National Bank, Sampath Bank and National Development Bank, with heavy selling in banks (Rs.1.86bn).

The Iran conflict has pushed oil above $110/bbl, forcing central banks to weigh supporting growth against fighting higher inflation. Emerging Asian central banks may reverse dovish stances or intervene to defend currencies amid risks of capital outflows and stagflation.

Treasury told ISB investors it expects GDP to average 3.1% annually from 2027–2030 and will maintain a long-term real interest-rate anchor of 2.5–2.6% under the IMF-supported program. The Treasury said the IMF RFI carried an approval-rate of about 3.27–3.28% and the IMF Fifth Review was delayed by Cyclone Ditwah but should advance in March 2026.

Government will maintain cost-reflective pricing for fuel and electricity despite rising global oil prices, avoiding subsidies that would burden state finances. Officials warned this could cause a short-term inflation spike to around 5–6% and dent export competitiveness (tea exports are exposed to the Middle East).

Experts urged the Government to ration fuel, warning supplies could be exhausted in about 20 days as oil rose above $90/barrel. The President said diesel stocks cover 33 days and petrol 28 days (extendable to ~40 days with scheduled incoming shipments) and outlined storage limits.

Global oil prices surged about 25% to around $119.5/barrel (Brent and WTI) on an escalating Iran war, reaching highs since mid-2022; analysts say Sri Lanka will be forced to raise domestic fuel prices when importing at the higher levels.

The Government and leading private-sector CEOs held the 'National Export Roadmap: The CEO Forum' to set strategic priorities for Sri Lanka's export sector, with the Industries Minister saying the Government will act as the main investor in industrial infrastructure. The EDB organized the forum and its outcomes will feed into a broader national export roadmap.

Fitch warns the Iran conflict could raise credit risks for emerging-market sovereigns by raising global energy prices and straining remittances, fiscal subsidies, exchange rates and access to finance; hydrocarbon exporters could benefit while importers (e.g. Pakistan, Egypt, Philippines, Ukraine) are more vulnerable.

Colombo Stock Exchange plunged with the ASPI down 3.28% to 21,957.83 as global oil prices surged above $100 a barrel amid the West Asia conflict; S&P SL20 fell 3.38% to 6,145.67 and market turnover was 1.97 billion rupees.

Brent crude topped $100/bbl at $107.97 and WTI about $106.22 as the Iran-related war disrupted Middle East production and shipping, sending prices ~16–17% higher from last Friday. The disruption has curtailed tanker traffic through the Strait of Hormuz and prompted Gulf output cuts.

BOI will host the 'Invest in Sri Lanka' Forum on 30 March 2026 at Cinnamon Life to showcase sustainable, technology-driven and high-value investment opportunities. The forum highlights include a 70% renewable electricity target by 2030 and prospects across hospitality, logistics, manufacturing and digital infrastructure.