News & market updates

The Petroleum Dealers’ Association has written to the President seeking intervention after CPC's Circular No.1109 (effective 1 March 2025) replaced percentage-based commissions with a capped tiered per-litre system that dealers say cuts earnings. Dealers warn incomes no longer cover salaries, loan repayments, VAT and working capital, and have requested an expert committee including dealer representatives to resolve the issue.

IMF congratulated Sri Lanka on reaching a staff-level agreement on the combined fifth and sixth reviews under the Extended Fund Facility and reaffirmed continued support for the country's economic recovery. IMF officials urged restoring cost-reflective energy pricing and maintaining reform momentum.

Sri Lanka received its first crude shipment for the Sapugaskanda refinery, bought at $71.99/barrel, the Deputy Energy Minister said. Two more shipments are due (Apr 29 at $71/barrel and mid‑May at $113/barrel); the refinery has lost efficiency using non‑Murban crude and CPC has ordered WTI.

Sri Lanka's Energy Minister Punya Sri Kumara Jayakody and Energy Ministry Secretary Udayanga Hemapala resigned effective Apr 17 to allow an independent Special Presidential Commission inquiry into alleged irregularities in coal imports and related electricity generation. The resignations follow a no-confidence motion and allegations of procurement corruption.

PMI Manufacturing rose to 66.7 and PMI Services to 59.4 in March 2026, indicating expansions driven by seasonal demand and strong financial services activity. Firms reported tight production from raw-material and fuel shortages, longer supplier delivery times and precautionary stocking amid the Middle East conflict.

IMF urged Sri Lanka to maintain its reform momentum as rising global oil and gas prices pose renewed risks to the recovery. It noted improved fiscal performance and near-completion of sovereign debt restructuring, while warning support for those hit by energy costs must be targeted and temporary.

Sri Lanka's manufacturing PMI rose to 66.7 in March from 56.8 in February, signalling continued expansion driven by seasonal demand. CBSL said all sub‑indices expanded (notably food & beverages and textiles), but firms reported raw material and fuel shortages, rising costs and shipping delays.

IMF/WEO: a Middle East war-driven energy shock is raising inflation and weakening external balances in Asia; the region is projected to grow 4.4% in 2026 and 4.2% in 2027 (from 5% in 2025) under the reference forecast. Higher energy costs hit refiners, utilities, manufacturers and tourism, tightening policy space; adverse/severe scenarios could cut cumulative growth by 1–2 percentage points and lift inflation further.

Asian stocks were set for a second week of gains as oil fell below $100, with Brent at $98.14/bbl and WTI at $93.15, after hopes for a near-term Middle East ceasefire eased energy-market acute stress.

Colombo Stock Exchange closed up as the ASPI rose 0.82% to 22,773.29 on Apr 17, 2026, led by gains in Central Finance (+5.83%), Hemas (+5.06%), Hayleys (+2.17%) and C T Holdings (+4.14%); NDB (-2.11%), HNB (-0.54%) and Commercial Bank (-0.47%) were top decliners.

Sri Lanka's rupee traded at 315.45/75 to the US dollar and government bond yields eased, with the 15.06.2029 quoted at 9.82/88% (down from 9.85/95%). The ASPI rose 0.62% as global markets rallied on diplomatic optimism and softer oil prices.

ADB economist Liliya Aleksanyan warned the central bank's depreciation of the rupee from 300 to 315 has amplified the cost of imported oil and added to monetary inflation. The ADB expects inflation could rise to 5.2% in 2026 amid excess liquidity from buy-sell swaps.

The U.S. nearly became a net crude exporter last week as exports rose to about 5.2 million bpd and net imports narrowed to 66,000 bpd, driven by supply disruptions from the Iran war. Analysts warn exports are nearing capacity (~6 million bpd) amid tanker and freight limits.

IMF MD Kristalina Georgieva warned policymakers must balance fiscal sustainability with protecting the most vulnerable as West Asia war shocks push up energy prices and slow global growth, and the IMF anticipates $20–50 billion in near-term demand for financial support.

The G-24 warned that rising global risks — including geopolitical tensions, higher energy prices, elevated inflation and tighter financing — threaten fragile recoveries in economies like Sri Lanka. The group urged more concessional finance, faster debt restructuring and stronger multilateral support.

Fitch says a steep rise in global energy prices has started to show up in March inflation data and has lifted government bond yields as markets price potential fiscal and monetary responses.

IMF cut its global growth outlook and warned the world is drifting toward a more adverse scenario, saying an adverse path could keep oil near $100/barrel and trim global growth to about 2.5%. It presented three scenarios (reference, adverse, severe) with the severe case pushing oil to $110–$125 and global growth to 2.0%.

IMF warned the US blockade and the Middle East war add fiscal pressure, projecting global growth to slow to 3.1% in 2026 and inflation to rise to 4.4%, while flagging fuel‑price and supply‑chain risks that could worsen the outlook. It also said global debt could reach 100% of GDP by 2029.

IEA, IMF and World Bank issued a joint statement saying the war in the Middle East has driven up oil, gas and fertilizer prices, disproportionately hurting energy importers and threatening food security, jobs and tourism. They said they will coordinate assessments and provide policy advice and financial support.

The war in the Middle East has raised global financial-stability risks, lifting energy prices and inflation expectations and pushing up sovereign yields and financial conditions. Markets have so far adjusted orderly, but vulnerabilities in nonbank credit, leverage, and high public debt amplify downside risks.

Colombo Stock Exchange ASPI rose 0.40% to 22,218.06 at midday, with market turnover of Rs.1 billion and diversified financials leading turnover at Rs.263 million. Ceylon Tea Brokers said it will not proceed with the sale of DP Logistics and its shares were up 3.39% at Rs.12.20.

IMF warned the war on Iran raises global recession risk, cutting global growth to 3.1% in 2026 and lifting 2026 inflation to 4.4%, and presented adverse/severe scenarios with growth as low as 2% and inflation above 6% if energy disruptions persist.

The U.S. military began a blockade of Iran’s ports while hopes for dialogue pushed benchmark oil prices below $100. The blockade heightens uncertainty for global energy supplies and shipping through the Strait of Hormuz.

Laugfs Gas consignment of about 7,000 MT of LPG was discharged from tanker ANDOVER at Hambantota International Port on 4 April, a shipment the port says can supply roughly 570,000 households and is the port's first gas consignment of 2026.

Fitch warns South and South‑East Asian banks face gradually building credit pressure from a prolonged Middle East conflict, with higher energy prices, supply‑chain disruption and weaker remittances likely to hit retail, micro‑enterprise and SME loan books first.

The Asian Development Bank warned that surging global fertilizer prices—urea up over 50% and ammonia up nearly 40% since late February—could renew food inflation pressures in Sri Lanka. Higher input costs may raise production expenses, lower crop yields and add to domestic inflation amid other global risks.

ADB projects Sri Lanka's growth will slow to 4.0% in 2026 from 5% last year, and warned a prolonged Middle East conflict could cut 0.5–0.8 percentage points from 2026 growth. It said lower tourism revenues, higher energy and fertilizer import costs and possible remittance weakness could also add 3–5 percentage points to projected 5.2% inflation.

ADB forecasts Sri Lanka's GDP to moderate to 4.0% in 2026 and 4.2% in 2027, with inflation set to rise to 5.2% largely due to the Middle East conflict. The economy remained resilient in 2025 with strong private consumption, record remittances, a primary surplus and higher reserves, but higher energy costs and weaker tourism/trade pose risks.

The ADB forecasts growth in developing Asia and the Pacific will slow to 5.1% in 2026 and 2027 (from 5.4% in 2025), citing the Middle East conflict and trade uncertainty; regional inflation is seen rising to 3.6% in 2026. The report warns of risks from higher energy and food prices, shipping disruptions and tighter financial conditions.

Global equities rebounded after Israel signalled it would begin talks with Lebanon, easing regional tensions; US crude retreated from highs to $97.71/bbl and Brent to $95.50/bbl. Treasury yields fell, the dollar weakened and gold rose 1.63% to $4,793.07/oz.