News & market updates

Opposition leader Sajith Premadasa said the NPP government has no scenario planning and blamed substandard coal procurement for electricity generation shortfalls of 130–148 MW on April 13–16, leading to expected power cuts during peak months and increased diesel use causing fuel shortages.

Colombo Stock Exchange has lost over Rs. 1.1 trillion in value since the Middle East war began, with the ASPI down 2.49% (521.17 pts) to 20,418.09 yesterday. Panic selling hit retail investors, with COMB, HAYL, DOCK, NDB and AEL among 227 decliners and net foreign selling of Rs.104.7m.

Secondary bond yields rose and market activity remained subdued ahead of a Rs.120 billion Treasury Bill auction (offered amount below maturing volume of ~Rs.142.44 billion). The rupee slightly appreciated to Rs.311.30/311.40 and short-tenor bills saw continued demand while longer-tenor yields moved higher.

Sri Lanka will allow private firms to import and sell fuel in US dollars for the export and tourism sectors to ease shortages; about 30 businesses have registered and can begin supplying fuel from tomorrow.

Colombo Stock Exchange closed down 2.41% as investors feared a fuel shortage, with the ASPI down 505.48 points to 20,433.78 and the S&P SL20 down 1.94% to 5,770.59. Top negative contributors were Commercial Bank (193, down 5.50), Hayleys (205, down 8.50) and Colombo Dockyard (108.75, down 10.75).

Oil prices rose about 3% as the Strait of Hormuz was largely shut amid the U.S.-Israeli war on Iran, with Brent at $103.28/bbl and WTI at $96.85/bbl, stoking supply shortage and inflation concerns.

Secondary Treasury bond yields rose amid Middle East unrest and Brent crude staying above $100, while the rupee weakened to Rs.311.50/311.60. Selected maturities traded higher (e.g. 01.07.28 at 9.25%, 01.10.32 at 10.30%) with secondary volume Rs.7.93bn.

Prosoft Research's Consumer Sentiment Index fell to 86 in February 2026 from 89 in January. The firm cites remaining recovery gaps and disruptions from gas shortages and coal shipment issues, and warns sentiment could be further affected by the Middle East conflict.

The Ceylon Chamber urged the government to temporarily limit non-essential foreign currency outflows and allow licensed bunkering firms to procure fuel independently, potentially in foreign currency, to protect exports and tourism amid the Middle East crisis. It also recommended prioritising IMF tranche continuity, dynamic fuel pricing, faster fuel and fertiliser procurement, and measures to support tourism and trade efficiency.

Government declared Wednesdays a weekly holiday for public sector employees effective tomorrow (18) to reduce fuel consumption; essential services (healthcare, ports, water, customs) are exempt and four committees will oversee energy and key sectors. Private sector asked to follow where feasible and state events suspended.

US has spent $12bn on strikes against Iran since Feb 28, White House adviser Kevin Hassett said; threats to the Strait of Hormuz and ongoing regional fighting are keeping energy markets jittery and could push fuel prices higher.

Former Ceylon Petroleum Corporation Chairman Mohamed Uvais urged the government to cut fuel taxes to help stabilise prices, noting fuels were already increased by Rs.25 across categories and warning that disruptions could affect up to 35% of global oil transport.

Brent crude rose $2.48 (2.5%) to $102.69/bbl and WTI gained $2.42 (2.6%) to $95.92 as disruptions in the Strait of Hormuz amid the U.S.-Israeli conflict with Iran raised supply-risk concerns; the UAE has cut production and the IEA urged possible extra releases from reserves.

Motorists reported continued registration problems with the government's National Fuel Pass and long queues as QR-code distribution resumed. A 35,000-tonne fuel shipment arrived; CPC said Lanka IOC placed 204 orders.

Crude oil surged above $100/bbl after US consideration of strikes on Iran’s Kharg Island (Brent $103.7, US crude ~$98.7); Asia‑Pacific equities traded mixed—Hang Seng +1.45%, Kospi +1.14%, Nikkei -0.13%, ASX200 -0.39%.

President Anura Kumara Dissanayake said the government will implement energy-management measures, including a QR system for daily fuel allocations, to ensure uninterrupted economic activity and essential services amid disruptions from the Middle East conflict; a committee was tasked to report required fuel allocations by end of today.

Ceylon Chamber urged the Government to adopt measures to safeguard economic stability, prioritising continuation of the IMF programme and timely tranches. It recommended fuel measures (dynamic pricing, QR system, faster procurement), securing fertilizer and aviation fuel, prioritising FX for critical imports, and bolstering tourism, exporters and port clearance.

Motorists reported lapses in registering for the National Fuel Pass after the government introduced QR-based fuel rationing, causing long queues, registration errors, hotline failures and fake registration sites. Some stations lacked QR readers or reportedly ignored the QR system despite limits intended to prevent queues.

Government reintroduced a national fuel QR-code rationing system on 15 March to manage depleted fuel stocks amid Middle East-driven supply disruptions, setting weekly vehicle quotas (cars 15L, motorcycles 5L, buses 60L, lorries 200L) and requiring online registration.

Sri Lanka's power mix shifted toward oil in the week ending 12 March: thermal fuel-based generation rose to 23.1% (oil-fired output 14.02 GWh on 12 March) from 19.9% in late February, while hydropower fell to 23.2% from 25.1%, raising import-cost risks as oil prices climb.

Tourism earnings fell 4.4% YoY to $352m in February despite a record 279,328 arrivals; February revenue was down 7.5% month-on-month and YTD tourism FX totaled $730.3m (-4.9% YoY).

Arutha Research warns the Middle East war risks Sri Lanka’s energy, food, exports and remittances — the UAE supplies about 38% of petroleum imports and CPC says fuel stocks cover roughly one month. Middle Eastern markets buy $852m (≈7%) of exports and Gulf countries provide about 38% of remittance inflows.

PickMe called for higher fuel quotas for ride‑hailing firms after the introduction of a QR code rationing system to manage scarce supplies. It argued app-based shared mobility uses fuel more efficiently and should be prioritized to keep people moving and protect drivers' livelihoods.

Police officers have been deployed at fuel stations nationwide after the reintroduction of a QR code system for fuel distribution to manage congestion and ensure orderly allocation; authorities urged motorists not to panic as allocations will be provided by vehicle category.

President Anura Kumara Dissanayake chaired a discussion on measures to address disruptions to coal, gas and oil supplies caused by the Middle East conflict, reviewing steps and alternatives (digital quota, work-from-home, fuel-saving) to minimise economic impact and ordering continuous monitoring.

Sri Lanka's secondary government bond market was volatile early in the week but closed broadly steady week‑on‑week. A Treasury Bond auction raised Rs.87.02bn (66.94% of Rs.130bn offered) amid undersubscription, foreign holdings fell by Rs.4.5bn, and system liquidity remained ample at around Rs.406.78bn.

Sri Lanka's Colombo Stock Exchange opened sharply lower: All Share Index down 2.41% to 21,169.00 and S&P SL20 down 2.41% to 5,937.93, with market turnover Rs 2.4 billion, as Brent crude topped $104/bbl amid ongoing Middle East strikes and Strait of Hormuz tensions.

Asian markets were cautious as Gulf hostilities kept oil elevated (Brent $104.01/bbl), complicating the inflation outlook and likely keeping most central banks on pause this week. The Fed is widely expected to hold while the RBA may hike to 4.1%.

CA Sri Lanka held a forum warning that prolonged Middle East instability could spike oil prices and disrupt remittances, tourism and tea exports, raising inflation, exchange-rate volatility and risks to the banking/financial sector.

LOLC Securities' Investor Forum said a sovereign credit rating upgrade could attract foreign inflows as CSE market capitalisation rose to about Rs.7.6 trillion (from Rs.2.9 trillion in 2022). The forum highlighted stabilised macro fundamentals, recovering exports and tourism, and sectoral opportunities in finance, construction and export-oriented industries.