The government is reportedly planning to recruit several prominent opposition figures for various key positions, following the appointment of former Samagi Jana Balawegaya (SJB) MP Eran Wickramaratne as Chairman of the Sri Lanka Cricket Transformation Committee.

Government leaders have reportedly stated on several occasions that they intend to bring more capable individuals from the opposition into important state roles.

According to political sources, discussions are currently underway with opposition politicians Mahinda Samarasinghe, Milinda Moragoda, and Harsha de Silva regarding possible appointments or collaborations with the government.

Mahinda Samarasinghe and Milinda Moragoda are both known for their extensive international connections and diplomatic experience, while Dr. Harsha de Silva is widely recognized for his expertise in economics and financial policy.

Milinda Moragoda, in particular, is known to maintain close ties with India. Sources further claimed that India is believed to be backing the effort to involve these individuals in the current administration.

A deepening financial scandal at National Development Bank PLC (NDB) has intensified scrutiny of Sri Lanka’s banking oversight, with former Finance Minister Ravi Karunanayake urging President Anura Kumara Dissanayake to take immediate and decisive action. The controversy centers on an internal fraud estimated at Rs 13.2 billion, raising serious concerns about governance, regulatory delays, and systemic weaknesses.

Despite the scale of the fraud, the bank’s current board remains in place, as it continues to meet minimum solvency requirements under the supervision of the Central Bank of Sri Lanka. However, this decision has sparked concerns about potential conflicts of interest, particularly as the board oversees a forensic audit into the very failures that occurred under its watch.

The forensic investigation, commissioned to Deloitte Touche Tohmatsu India LLP, is expected to trace the movement of funds and report directly to the Central Bank. Yet critics argue that this alone is insufficient. While forensic audits identify where the money went, a parallel management audit is needed to determine why internal controls failed and whether leadership negligence or complicity played a role.

Internationally, such crises often trigger the appointment of a statutory administrator to independently oversee affected institutions. In Sri Lanka, however, regulators appear to be waiting for preliminary audit findings to establish gross negligence before removing board members—an approach some see as overly cautious given the scale of the losses.

Karunanayake has highlighted that at least two commercial banks had alerted the Financial Intelligence Unit about suspicious transactions nearly 16 months before the fraud became public. He argues that this delay reflects a serious breakdown in regulatory responsiveness and accountability.

The letter outlines several systemic weaknesses, including poor middle-office monitoring processes, the absence of automated reconciliation between CEFT and RTGS systems, and outdated banking software infrastructure. Questions have also been raised about whether the Securities and Exchange Commission of Sri Lanka and the Colombo Stock Exchange properly supervised NDB’s Rs 16.2 billion debenture issuance.

Karunanayake has also called for calculating and recovering tax revenue losses linked to the fraud and suggested seeking technical support from the Reserve Bank of India, Bank of England, and Monetary Authority of Singapore. He further urged a review of Sri Lanka’s regulatory framework and stronger oversight of audit committees.

Meanwhile, the Criminal Investigation Department has launched a parallel criminal investigation, arresting several suspects including senior IT and managerial staff. This forms part of a broader coordinated effort involving auditors, regulators, and law enforcement.

With investor confidence under pressure, the NDB scandal has become a major test of Sri Lanka’s financial governance and regulatory strength.

Sri Lanka’s trade landscape underwent a notable shift in 2025, with China emerging as the country’s largest trading partner, overtaking India for the first time in four years. According to the Central Bank of Sri Lanka’s Annual Economic Review, total trade with China reached approximately $5.5 billion, slightly exceeding India’s $5.4 billion. This development reverses a trend seen from 2021 through 2024, when India consistently held the top position. The United States retained its place as the third-largest trading partner, contributing $3.5 billion, with the three nations collectively accounting for just over 41% of Sri Lanka’s total merchandise trade.

The transition reflects a broader recovery in Sri Lanka’s external sector following years of economic turbulence. Both exports and imports showed improvement, but the most significant driver of change was a sharp acceleration in imports. In particular, the easing of import restrictions—introduced during the country’s external crisis played a decisive role in reshaping trade flows. Among the most influential factors was a surge in vehicle imports, especially electric and hybrid models, which significantly boosted overall trade values.

Trade patterns over the past several years reveal how policy decisions and economic conditions have influenced partner rankings. During 2022 and 2023, when import controls were at their strictest, trade volumes with both China and India declined. However, the contraction was more pronounced with China. This disparity can be explained by the composition of Chinese exports to Sri Lanka, which largely consist of machinery, construction materials, and other investment-related goods categories that were among the first to be restricted.

India, on the other hand, maintained more stable trade levels during this period. Its exports to Sri Lanka are heavily weighted toward essential goods such as fuel, pharmaceuticals, and intermediate products, which remained in demand despite tight controls. This resilience allowed India to retain its leading position until the relaxation of restrictions began to reshape import dynamics.

From 2024 onward, Sri Lanka’s trade recovery has been primarily import-driven. The resurgence of high-value imports, particularly vehicles sourced from China, accelerated the growth of bilateral trade between the two countries. China’s strong position in the electric and hybrid vehicle market further amplified this trend, enabling it to edge past India in total trade value.

Despite this milestone, the shift has also highlighted structural imbalances. Sri Lanka’s trade deficit with China widened significantly, reaching $4.9 billion in 2025, up from $4.1 billion the previous year. This increase was largely driven by rising imports of vehicles and construction materials, while exports to China remained comparatively low.

While India also saw a widening trade deficit with Sri Lanka partly due to increased vehicle imports the United States continued to stand out as a key export destination. Sri Lanka maintained a trade surplus of $2.5 billion with the US, primarily supported by strong apparel exports, underscoring the continued importance of diversified trade relationships.

Sinopec’s push for a larger share of Sri Lanka’s domestic fuel market is raising serious concerns about the future of the state-owned Ceylon Petroleum Corporation (CPC). If approved, the proposed expansion could fundamentally alter the structure of the country’s petroleum industry, weakening CPC’s dominance and accelerating ongoing sector reforms.

For decades, CPC held a near-monopoly over Sri Lanka’s fuel market. Even after partial liberalization in 2003, it retained a commanding 80–90% share. That dominance has already begun to erode, with CPC’s retail share dropping to around 57% following the entry of private competitors. Sinopec’s current operations include approximately 150 fuel stations previously managed by CPC, with plans to add at least 50 more.

If Sinopec secures approval to supply up to 40% of the local market, further transfers of CPC-operated outlets are likely. This would significantly dilute CPC’s presence and reduce its control over fuel distribution.

Financial pressures are already mounting. Although CPC reported a profit of Rs. 36.4 billion in 2025, auditors have warned that its long-term viability remains uncertain due to accumulated losses and negative net assets. Increased competition has played a role in this instability, particularly as Sinopec adopts aggressive pricing strategies selling fuel at Rs. 3 to Rs. 7 less per liter than CPC.

Should Sinopec’s market share grow further, CPC will face a difficult choice: lower prices to remain competitive, thereby squeezing already thin margins, or risk losing even more customers. Either scenario could deepen its financial challenges.

Operationally, the impact could be just as significant. CPC’s Sapugaskanda refinery, now over 50 years old, meets only about 30% of its fuel demand. In contrast, Sinopec’s proposed refinery would have a capacity of 200,000 barrels per day, making it vastly more efficient. This disparity could render the state refinery economically obsolete, potentially leading to downsizing or closure.

At the same time, CPC’s role within the industry is already shifting. Through its subsidiary, it provides storage and distribution services, earning fees from logistics operations. While this offers an alternative revenue stream, it effectively transforms CPC from a primary supplier into a service provider—even for its competitors.

These changes are unfolding alongside IMF-driven reforms aimed at restructuring state-owned enterprises. A key requirement is the elimination of cross-subsidies, which have historically allowed CPC to stabilize fuel prices. Increased competition from a more efficient private player like Sinopec makes such subsidies increasingly unsustainable.

In this context, Sinopec’s expansion is not just a commercial issue it represents a turning point for Sri Lanka’s energy sector. The decisions made in the coming months will determine whether CPC can adapt to a more competitive environment or continue its decline in a rapidly evolving market.

The government is considering stricter controls on children’s use of digital devices and social media, citing growing concerns over exploitation, addiction, and behavioural issues linked to unsupervised access, Women and Child Affairs Minister Saroja Savithri Paulraj said.

She noted that authorities are exploring measures such as limiting mobile device use among young children and imposing restrictions on social media access for minors.

A special committee chaired by Prime Minister Dr. Harini Amarasuriya has been appointed to develop policy recommendations aimed at enhancing child safety in the digital space.

According to the minister, proposals under consideration include prohibiting children under the age of five from accessing digital screens and banning social media use for those under 12.

She added that the measures are being evaluated in response to increasing risks associated with digital technology, with the aim of ensuring a safer environment for children.

The Public Utilities Commission of Sri Lanka (PUCSL) has announced that public consultations on the proposed electricity tariff revision for 2026 will commence in Colombo today (May 6).

According to the PUCSL, oral submissions from the public will be accepted from 8:30 a.m. to 3:00 p.m. at the Bandaranaike Memorial International Conference Hall (BMICH).

The consultation is being held in accordance with the Sri Lanka Public Utilities Commission Act No. 35 of 2002 and the amended Sri Lanka Electricity Act No. 36 of 2024.

The proposed tariff revisions for the second and third quarters of the year have been submitted by the National System Operator (Pvt) Ltd.

U.S. President Donald Trump on Tuesday (May 5) announced a temporary pause in “Project Freedom,” the American operation aimed at reopening the Strait of Hormuz, citing ongoing efforts to finalize an agreement with Iran.

In a post on Truth Social, Trump said the decision was made following requests from key mediators, including Pakistan, and to allow space for diplomatic progress.

“We have mutually agreed that, while the blockade will remain in full force and effect, Project Freedom will be paused for a short period of time to see whether or not the agreement can be finalised and signed,” he stated.

Despite the pause, Trump confirmed that the blockade on Iranian ports would continue. He also pointed to what he described as “tremendous military success” and progress toward a potential agreement as contributing factors behind the move.

The launch of Project Freedom on Monday had sharply escalated tensions between Washington and Tehran, with both sides reporting exchanges of fire in the strategic waterway.

U.S. Secretary of State Marco Rubio said Washington has concluded its offensive operations for now, but warned that the U.S. is prepared to respond forcefully to any further threats to shipping in the Strait of Hormuz.

Meanwhile, U.S. military officials emphasized that forces remain on standby. General Dan Caine noted that Central Command is ready to resume major combat operations if ordered, warning that restraint should not be mistaken for weakness.

Tensions remain high, with Iran’s chief negotiator indicating that Tehran’s response could intensify, while the Revolutionary Guards navy warned of a “firm response” to any deviation from designated shipping routes.

The United Arab Emirates reported intercepting missiles and drones allegedly launched by Iran for a second consecutive day, though Tehran has strongly denied carrying out such attacks.

Recent clashes have marked the most serious escalation since a month-long truce, with Iran reportedly launching missiles and drones at U.S. forces, and Washington responding with strikes on Iranian vessels it accused of threatening commercial shipping.

Despite the volatility, Trump urged Iran to reach an agreement, stating he preferred a diplomatic resolution. Iranian President Masoud Pezeshkian has indicated openness to dialogue, while rejecting U.S. demands described as “maximum pressure.”

Police have dismissed claims made by former MP Udaya Gammanpila regarding the death of Treasury official Ranga Rajapaksha, stating that his remarks are false and contradict official findings.

Speaking at a media briefing, Police said Gammanpila’s assertion that the victim’s wife had lodged a complaint describing the death as suspicious is untrue.

Gammanpila had earlier questioned whether the death was a suicide or staged to appear as one, and called for clarification on fingerprint evidence.

However, Police stated that initial investigations, including the post-mortem examination and forensic analysis, found no evidence of a struggle or external involvement. According to authorities, the injuries were determined to be self-inflicted, and the death has been concluded as a suicide based on the available evidence.

Police further noted that Gammanpila’s statements contradict the findings of investigators, forensic specialists, and the Government Analyst.

They added that the former MP will be summoned to provide a statement and may be required to present evidence before the Kuliyapitiya Magistrate’s Court in support of his claims.

Officials emphasized that any concerns regarding the findings can be addressed through the appropriate judicial process.