By: Staff Writer

June 02, Colombo (LNW): The Government’s latest fuel price revision may satisfy the mathematical requirements of Sri Lanka’s IMF-backed pricing formula, but industry representatives warn that its economic consequences are only beginning to unfold.

Sri Lanka’s IMF-supported fuel pricing mechanism determines retail fuel prices using four components: landed import cost (V1), processing and distribution costs (V2), administrative expenses (V3), and government taxes and levies (V4).

For Petrol 92, V1 was Rs. 265.05/litre, V2 Rs. 38.50, V3 Rs. 8.20, and V4 Rs. 121.58. Using the formula V1 + V2 + V3 + V4 = Retail Price, the calculated price is Rs. 433.33/litre (265.05 + 38.50 + 8.20 + 121.58). The CPC’s official price is Rs. 434, a marginal difference of 67 cents due to rounding or exchange-rate adjustments.

Similarly, Lanka Auto Diesel’s formula-based price is Rs. 406.52/litre, compared with the CPC’s official price of Rs. 407, a difference of only 48 cents, indicating close adherence to the pricing formula.

The fuel increase, effective from May 31, has triggered concerns across transport, agriculture, fisheries, and small business sectors, where fuel remains a critical operating expense.

Although the National Transport Commission has ruled out an immediate bus fare revision, private operators are already pushing for relief. Lanka Private Bus Owners Association President Gemunu Wijeratne says operators intend seeking a five per cent fare increase following the diesel hike.

“Diesel is one of the key components considered when determining fares. The increase has added to operational costs at a time when the sector is already struggling,” he noted.

The pressure extends beyond transport.

National Agrarian Unity President Anuradha Tennakoon warned that higher diesel prices could push rice production costs significantly higher, estimating that producing a kilogram of rice may soon cost around Rs. 140. Farmers depend heavily on diesel-powered machinery for cultivation, irrigation, harvesting, and transport.

Agricultural organisations are now calling for targeted fuel assistance or quota systems to prevent further erosion of profitability in the sector.

Meanwhile, the bakery industry is closely monitoring developments. Although ingredient prices remain stable for now, industry representatives caution that any increase in LP gas prices could trigger a fresh round of food price hikes.

Three-wheeler operators have also expressed frustration. All Island Three-Wheeler Owners Association President Lalith Dharmasekara noted that operators have yet to receive adequate fuel quotas or officially revised fare structures.

The broader concern among economists is the inflationary ripple effect generated by fuel price increases.

Fuel serves as a foundational input across the economy. Higher transport and logistics costs inevitably raise the price of food, consumer goods, and industrial production. Businesses often pass these additional expenses on to consumers, creating a chain reaction that affects nearly every household.

The burden is especially severe for low-income families and informal-sector workers whose earnings do not automatically adjust with inflation. For such households, fuel-related increases can consume a growing share of monthly expenditure, reducing disposable income and purchasing power.

Before the Government argues that the alternative would be far more damaging.

Before the introduction of the cost-reflective pricing mechanism, fuel was often sold below cost, generating massive losses for state-owned energy institutions and placing additional pressure on public finances. The IMF-backed formula was designed to eliminate such distortions and ensure that retail prices reflect actual market conditions.

The latest calculations appear to validate that objective. The formula-generated price for Petrol 92 was Rs. 433.33 per litre, compared with the official price of Rs. 434. For Lanka Auto Diesel, the calculated figure was Rs. 406.52 against an official retail price of Rs. 407.

While these figures demonstrate strict compliance with the pricing model, they also underline a difficult reality: global oil shocks are now transmitted directly to consumers. The formula may protect state finances, but it offers little insulation for citizens confronting the rising cost of living.

June 02, Colombo (LNW): The Government is set to conduct a comprehensive review of water sector expenses at the end of June before deciding whether any changes to consumer water charges are necessary, according to Minister of Housing, Construction and Water Supply Susil Ranasinghe.

Speaking after a ceremony where newly appointed Management Assistants of the National Water Supply and Drainage Board received their letters of appointment, the Minister stressed that no decision has been taken regarding a possible tariff revision and that current rates remain in place.

He noted that the upcoming assessment, scheduled for June 30, will examine operational and treatment costs incurred during the first half of the year. The review is expected to provide authorities with a clearer picture of the financial position of the water supply sector before any policy decisions are made.

The Minister’s remarks follow a Cabinet determination made earlier this year to maintain existing water tariffs for the first six months of 2026. At the time, officials indicated that revenue generated under the current pricing structure was sufficient to meet operational requirements and sustain service delivery.

Addressing public speculation over a potential increase, Ranasinghe acknowledged that the recent adjustment to electricity charges could place some additional pressure on operating costs, given the energy-intensive nature of water treatment and distribution. However, he maintained that any resulting impact on household water bills would likely be limited.

According to the Minister, the National Water Supply and Drainage Board will evaluate expenditure related to water purification, pumping operations, maintenance activities and other essential services before presenting its findings for consideration.

He also expressed confidence that the sector’s financial performance would remain stable enough to avoid passing additional costs on to consumers.

While the final decision will be made following the June review, Ranasinghe indicated that, based on current projections, a tariff increase appears unlikely. Nevertheless, he emphasised that authorities would make their determination only after carefully analysing all financial and operational data from the first six months of the year.

June 02, Colombo (LNW): Consumers are expected to learn this week whether domestic cooking gas prices will change for June, with Litro Gas Lanka confirming that its latest price review will be announced on Thursday.

The revised pricing structure, if adjusted, is scheduled to come into effect from June 05 following the completion of the company’s monthly evaluation process.

Company officials stated that the necessary reports and pricing recommendations have already been forwarded to the relevant authorities, while the final assessment required for the review is anticipated within the next day.

The outcome will determine whether households will face an increase, decrease or continuation of existing prices for liquefied petroleum gas (LPG).

According to the state-run LPG provider, international market conditions remain a key factor in calculating local prices. Fluctuations in global energy markets, shipping costs and benchmark LPG rates are all taken into consideration before any decision is made regarding domestic retail prices.

An official statement outlining the revised rates is expected to be released once the final evaluation process is completed.

June 02, Colombo (LNW): The Colombo Fort Magistrate’s Court has directed two prominent legal practitioners to appear as witnesses in the ongoing magisterial inquiry into the death of former SriLankan Airlines Chief Executive Officer Kapila Chandrasena.

In an order issued on Monday, Chief Magistrate Pasan Amarasekara summoned President’s Counsel Rienzie Arsecularatne and Attorney-at-Law Udara Muhandiramge to provide evidence as part of the continuing investigation. The two lawyers have been listed among the next witnesses expected to testify when proceedings resume later this week.

During the hearing, investigators from the Colombo Crimes Division informed the court that efforts are underway to conduct a more comprehensive forensic examination of the late Chandrasena’s mobile phone. Authorities revealed that arrangements are being made through the Ministry of Justice to send the device, an iPhone, to the United States for specialised technical analysis.

The court also authorised investigators to forward a green-coloured strap recovered from the deceased’s residence to the Government Analyst’s Department for scientific examination. Officials believe the results could assist investigators in establishing additional facts relevant to the inquiry.

In his ruling, the Magistrate emphasised that legal protections relating to confidential communications would remain in force. Referring to applicable provisions of the Evidence Ordinance and Supreme Court procedural rules, he noted that any legal advice provided to Chandrasena, as well as privileged oral or written communications involving his legal representatives, would not be subject to disclosure during the proceedings.

The two lawyers were formally designated as the 19th and 20th witnesses in the inquiry and have been instructed to appear before court on 5 June. The investigation has been adjourned until that date, when further evidence is expected to be recorded.

The inquiry continues to attract considerable public attention, with investigators pursuing multiple forensic and testimonial avenues in an effort to establish the circumstances surrounding Chandrasena’s death.

June 02, Colombo (LNW): The Jaffna Magistrate’s Court has authorised former President Gotabaya Rajapaksa to provide evidence via video link in proceedings related to the disappearance of two political activists more than a decade ago.

The case concerns the unresolved disappearance of Lalith Kumar Weeraraj and Kugan Muruganandan, both associated with a civil society movement that campaigned on issues relating to missing persons and post-war accountability. The two men vanished in the Jaffna peninsula in December 2011, shortly before an event organised to coincide with International Human Rights Day.

The matter has remained the subject of legal scrutiny for several years, with family members pursuing judicial remedies in an effort to uncover the circumstances surrounding the activists’ disappearance. A Habeas Corpus application filed before the Court of Appeal led to directions for witness testimony to be gathered through the Jaffna Magistrate’s Court, which has been overseeing related proceedings since 2012.

As part of the inquiry, Gotabaya Rajapaksa, who served as the Defence Secretary during the disappearance, was later identified as a witness and summoned to provide evidence. However, his legal representatives repeatedly informed the court that he faced difficulties travelling to Jaffna due to security-related concerns and sought permission for him to testify remotely.

In earlier hearings, the court requested supporting documentation regarding the alleged security risks before considering the application. Following the submission of the required material, the matter was revisited when the case was called this week.

After reviewing the request, the Magistrate granted approval for Rajapaksa’s evidence to be recorded through video conferencing technology, allowing him to participate in the proceedings without appearing in person.

The decision is expected to facilitate the continuation of the long-running inquiry, which remains closely watched by human rights advocates, legal observers and the families of the missing activists. The case has become one of several unresolved disappearance investigations linked to Sri Lanka’s post-war period and continues to draw public interest more than a decade after the two men were last seen.

Court proceedings are scheduled to continue with the recording of witness testimony as the inquiry moves forward.

June 02, Colombo (LNW): The Government has approved an extension of financial assistance for families left without permanent homes following the widespread destruction caused by Cyclone Ditwah and the subsequent flooding and landslides that affected several parts of the country.

The support scheme, which provides a rental allowance to homeowners whose properties were rendered uninhabitable, will now continue for an additional three months, offering further relief to those still struggling to rebuild their lives.

Under the revised arrangement, eligible families will be able to receive assistance for a total of nine months, compared with the original six-month period. The decision was endorsed by the Cabinet of Ministers in recognition of the challenges many affected households continue to face in completing reconstruction work.

Officials noted that while rebuilding efforts are progressing in numerous areas, delays linked to construction costs, labour shortages and adverse weather conditions have slowed the recovery process for some families. As a result, many displaced residents remain dependent on temporary accommodation while repairs or new housing projects are completed.

The extended allowance is expected to ease the financial burden on affected homeowners by helping cover rental expenses during the transition period. Authorities believe the measure will provide greater stability and security for families as they work towards returning to permanent residences.

The government has also reaffirmed its commitment to supporting disaster recovery initiatives and assisting communities impacted by natural calamities, with housing reconstruction remaining a key priority in the ongoing rehabilitation programme.

June 02, Colombo (LNW): The Sri Lanka Air Force (SLAF) is preparing to expand its operational and training capacity following the arrival of a fleet of ten TH-57 Sea Ranger helicopters donated by the United States.

Transported to the island by sea, the helicopters represent one of the latest developments in the long-standing defence partnership between Colombo and Washington. Military officials have described the transfer as a significant enhancement to the Air Force’s aviation resources and a valuable contribution towards strengthening a range of mission-critical capabilities.

The aircraft have been moved to SLAF Base Ratmalana, where engineers and technical personnel are carrying out inspections, system evaluations and configuration work before the helicopters are formally commissioned into service. A series of acceptance procedures and test flights will be completed prior to their operational deployment.

June 02, Colombo (LNW): Private bus operators across Sri Lanka are expected to hold a crucial meeting today (02) to determine how the sector should respond to mounting financial pressures following the recent increase in diesel prices.

Industry representatives are set to discuss a range of options, including measures to mitigate escalating operating costs after authorities opted not to approve an immediate revision of bus fares. The outcome of the discussions could have significant implications for public transport services in the coming weeks.

Lanka Private Bus Owners’ Association President Gemunu Wijeratne said the meeting would bring together leaders from several private transport organisations to assess the challenges currently facing operators and explore possible solutions.

According to Wijeratne, many bus owners have expressed growing concern over the sustainability of services under the present fare structure, arguing that rising fuel expenses, maintenance costs and other operational expenditures are placing severe strain on the industry.

He noted that operators had hoped for discussions with the government regarding relief measures or a possible fare adjustment but claimed that no satisfactory response had been received thus far. As a result, several stakeholders are reportedly calling for stronger action to highlight the difficulties faced by the sector.

While some bus owners have advocated reducing or temporarily suspending services as a form of protest, Wijeratne stressed that no final decision has yet been taken. He said the associations would first evaluate all available options and consider the potential impact on both operators and passengers before announcing a collective position.

June 02, Colombo (LNW): Sri Lanka has signalled its intention to deepen ties with Bangladesh, with officials highlighting the growing potential for broader cooperation and stronger diplomatic engagement between the two South Asian nations.

The sentiment was expressed during a meeting in Colombo between Deputy Foreign Minister Arun Hemachandra and Bangladesh’s outgoing High Commissioner, Andalib Elias, who paid a farewell courtesy call ahead of the conclusion of his diplomatic mission in Sri Lanka.

During the discussion, Hemachandra commended the High Commissioner for his role in fostering closer relations between the two countries over the course of his tenure. He noted that bilateral cooperation had expanded steadily in recent years and stressed the importance of maintaining that momentum through increased political dialogue and institutional collaboration.

The Deputy Foreign Minister observed that both countries are well positioned to take their relationship to a new stage, particularly through greater engagement at the highest levels of government. In this regard, he emphasised the value of arranging an official state visit in the near future, describing such an initiative as a meaningful step towards unlocking fresh opportunities in trade, investment, education and regional cooperation.

Officials also discussed the importance of strengthening people-to-people connections and exploring new avenues for collaboration in areas of mutual benefit, including economic development, maritime affairs and cultural exchanges.

Responding to the remarks, High Commissioner Elias reaffirmed Bangladesh’s commitment to expanding its partnership with Sri Lanka and expressed confidence that bilateral relations would continue to flourish in the years ahead. He thanked Sri Lankan authorities for their support and cooperation throughout his assignment, noting that the friendship between the two nations remains rooted in mutual respect and shared regional interests.