President Thanks India, China and Russia for Fuel Supply Support

Anura Kumara Dissanayake thanked India, China, and Russia for their support in helping Sri Lanka secure essential fuel supplies.

President Anura Kumara Dissanayake stated that during discussions with Indian Prime Minister Narendra Modi, India agreed to supply fuel to Sri Lanka, for which he expressed gratitude.

He further noted that China and Russia have also indicated their willingness to support Sri Lanka’s fuel requirements. The Chinese government, he said, has expressed readiness to provide diesel and petrol, while diplomatic discussions have already taken place following engagements involving Sri Lanka and Chinese officials.

The President added that Russia has likewise agreed to assist with fuel supplies, highlighting recent visits by Russian officials, including the Energy Minister and Deputy Foreign Minister, during which support commitments were conveyed.

He also referred to communications regarding U.S. President Donald Trump’s approval allowing Sri Lanka to continue fuel-related transactions with Russia until April 11, although it remains uncertain whether this permission will be extended. He stressed that diplomatic efforts are ongoing to ensure uninterrupted fuel supplies.

Addressing Parliament, the President also announced a Rs. 100 billion relief package to be implemented over three months to help ease the impact of the Middle East crisis.

On the economic front, he said discussions with the International Monetary Fund (IMF) have been productive, with efforts underway to secure a staff-level agreement by Thursday. If finalized locally, Sri Lanka could receive around USD 700 million before the end of May through the combined fifth and sixth tranches.

He further noted that the Asian Development Bank (ADB) has agreed to provide USD 1.2 billion in assistance this year, while the World Bank has also signaled its willingness to extend financial support.

The President said several sectors are currently under strain due to global conditions, adding that the government’s priority is to support affected groups through targeted relief measures.

He also outlined policy options for fuel pricing, including cost-reflective pricing and subsidy-based mechanisms, stressing the need for a balanced approach that considers both state finances and public impact.

“Accordingly, we examined the impact of rising fuel prices. If adjusted to market rates, the price of a litre of diesel would exceed Rs.600. This price includes a tax of Rs. 50. I have noted that some have proposed removing this Rs. 50 tax. However, even if the tax is removed, the price would only reduce by Rs. 50. Instead, our approach is to retain the tax while allocating up to Rs. 100 per litre of diesel from the Treasury.

“This means that on or around May 1, we will reintroduce the fuel pricing formula.This will be calculated based on actual data from the preceding month. At the next revision, a subsidy of up to Rs. 100 per litre of diesel will be provided, calculated against the actual cost. Similarly, a subsidy of up to Rs. 20 per litre of petrol will be granted.This will cost Rs. 20 billion per month. We have structured this proposal for a period of three months. Accordingly, Rs. 60 billion has been allocated for diesel and petrol subsidies. This is highly significant, as we are not placing the entire burden on the public.

As a principle, subsidies should be targeted at specific groups. However, we currently lack a sufficiently accurate data system to do so. Therefore, we have decided to align the prices of super diesel and super petrol with market rates, while not applying the same adjustment to other fuel types. After considering this issue in various ways, the government will bear a cost of Rs. 100 per litre of diesel. At the same time, selected communities, particularly the fishing community, depend heavily on fuel as a key component of their livelihoods. Therefore, we explored whether additional relief could be provided to them beyond the general subsidy.

Accordingly, for boats with standard engines, regardless of whether they use petrol, diesel, or kerosene, we will provide an additional Rs. 50 reduction per litre on top of the existing Rs. 100 subsidy. A standard fishing boat will receive 25 litres per day over 25 days, amounting to 625 litres per month at this reduced rate. The Rs. 50 subsidy component will be credited directly to their bank accounts. As a result, each owner of a standard fishing boat will receive Rs. 31,250 per month. This support will be provided for a period of three months.

Furthermore, multi-day fishing vessels typically venture out to sea only once every three months. Therefore, within this three-month period, a fuel allowance of Rs.150,000 will be provided per multi-day vessel for a single voyage. In addition to the general subsidy, we intend to implement a targeted relief programme specifically for the fishing community.

“We  have decided to provide a subsidy to consumers whose electricity usage is below 90 units, to offset the changes in the next electricity bill. For this purpose, we will allocate Rs. 5 billion per month, amounting to Rs. 15 billion over three months. Current estimates suggest that losses over the three-month period may reach around Rs. 32 billion. Of this, the government will bear Rs.15 billion, while around Rs. 7 billion may arise from issues related to coal, which will be recovered accordingly. This is the approach we are taking. If there is a better alternative, we are open to hearing it.

Source of the news: DailyNews.lk

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