By: Staff Writer
March 24, Colombo (LNW): Sri Lanka’s post-import-ban vehicle boom has not only reshaped the automobile market but also triggered wider economic consequences, from rising fuel consumption to expanding credit flows though recent data suggests the surge may finally be stabilizing.
Following the reopening of vehicle imports in 2025, Sri Lanka experienced a massive influx of vehicles across categories. Monthly registrations remained elevated into early 2026, with 55,365 vehicles registered in January and 51,682 in February. While February recorded a decline of 3,683 units, the overall numbers still reflect a historically high level of activity.
This rapid expansion has contributed to a sharp increase in the country’s total vehicle population, now estimated at over 8 million units, dominated by two-wheelers. As a result, fuel consumption has surged noticeably compared to the pre-ban period, adding strain to Sri Lanka’s already vulnerable foreign exchange position amid high global oil prices.
The economic ripple effects extend beyond fuel. Banking sector data shows a significant rise in credit to retail and wholesale trade sectors, partly driven by financing for large vehicle inventories held by dealers. Credit-backed purchases now account for a substantial share of vehicle sales, highlighting the role of lending in sustaining demand.
However, the apparent strength in registrations may be misleading. A government-imposed 3% monthly penalty on vehicles not registered within 90 days has incentivized dealers to register unsold stock, inflating official figures. This suggests that actual end-user demand may be weaker than headline numbers indicate.
Import data supports the view that momentum is cooling. Total vehicle imports fell from $311.1 million in December to $236.4 million in January, with personal vehicle imports dropping sharply by 32%. Although February data is yet to be released, indicators such as the Central Bank’s $461 million forex purchases point to reduced import pressure and a possible current account surplus.
Structurally, the market is also evolving. There is a clear shift toward compact vehicles, SUVs, and crossovers, while traditional passenger cars are losing share. Electric vehicles and hybrids remain significant but showed slower growth in February. Meanwhile, two-wheelers continue to dominate volumes, outperforming previous import cycles.
Japanese brands still lead the market, though Chinese and Indian manufacturers are making inroads, especially in the electric segment. Three-wheeler registrations, while recovering, remain below historical peaks.
Compared to previous cycles particularly the 2015 surge the current boom is notable but less extreme. More importantly, the emerging slowdown suggests a transition toward a more sustainable level of imports.
If this moderation continues, it could help stabilize fuel demand, ease pressure on foreign reserves, and reduce risks to the broader economy marking a crucial turning point after months of rapid expansion.
Sri Lanka’s Fuel Demand, Credit Growth Rise with Vehicle Import Wave
Fertilizer Shock Threatens Sri Lanka’s Food Security Stability
By: Staff Writer
March 24, Colombo (LNW): Sri Lanka is confronting a deepening agricultural and food supply crisis as global tensions disrupt vital import routes. The closure and instability around the Strait of Hormuz triggered by the escalating US–Israel conflict with Iran have severely impacted the country’s access to fertilizer and food imports.
A recent report by UN Trade and Development warns that nations heavily dependent on this route face significant risks, with Sri Lanka among the most exposed. Around 36% of its fertilizer imports pass through the chokepoint, making supply chains highly vulnerable to disruption.
In response, the Ministry of Agriculture Sri Lanka is scrambling to secure alternatives, including emergency urea imports from China to bypass Middle Eastern shipping lanes. However, global markets remain volatile. Urea prices have surged sharply from about $470 to over $584 per tonne in early March 2026, with spikes reaching $720 in some regions. Locally, this could push a 50kg fertilizer bag to between Rs. 15,000 and Rs. 20,000, a steep rise from earlier prices near Rs. 9,200.
Despite government assurances that supplies are sufficient for the current Yala season, farmer groups are unconvinced. The National Agrarian Union has raised concerns about deteriorating storage conditions and delays in procurement for the upcoming Maha season. Its president, Anuradha Tennakoon, has publicly challenged official claims of long-term stock security, disputing statements by Deputy Agriculture Minister Namal Karunarathne.
Beyond fertilizer, Sri Lanka’s broader food security is also at risk. The country imports nearly all of its fertilizer and relies heavily on foreign food supplies, including approximately 1.6 million tonnes of cereals annually. With food imports exceeding $1.8 billion each year, any disruption to global production or trade could trigger domestic shortages and price shocks.
Experts warn that if fertilizer scarcity affects major agricultural exporters, global grain prices may surge, compounding Sri Lanka’s vulnerability. Meanwhile, soaring shipping insurance costs—reportedly up over 1,000% are further inflating import expenses.
International agencies such as the Food and Agriculture Organization and the World Food Programme are closely monitoring the situation, with calls already emerging for emergency funding to support farmers. As uncertainty grows, Sri Lanka faces a critical test: securing its agricultural backbone before supply shocks cascade into a full-scale food crisis.a
Crypto Cash Heists Drain Billions from Sri Lanka’s Economy
By: Staff Writer
March 24, Colombo (LNW): Sri Lanka’s fragile economy is facing a new and largely invisible threat: the rapid rise of crypto currency linked financial fraud and capital flight. While digital currencies promise innovation, recent investigations reveal a darker reality billions siphoned out of the country through loosely regulated channels.
Authorities have uncovered multiple large-scale frauds, including a high-profile case involving the disappearance of Rs. 290 million, allegedly laundered through global platforms such as Binance. The case, now under investigation by the Criminal Investigation Department (CID), has already implicated 19 suspects accused of exploiting loopholes in Sri Lanka’s foreign exchange framework.
Officials say this is only the tip of the iceberg. Another ongoing probe involves a staggering Rs. 14 billion scam affecting nearly 8,000 victims one of the largest financial frauds linked to digital assets in the country’s history. Investigators believe these schemes often lure investors with promises of high returns before funneling funds into crypto wallets beyond regulatory reach.
The Central Bank of Sri Lanka has long maintained a cautious stance. While citizens are not explicitly banned from investing in crypto, financial institutions are prohibited from facilitating such transactions. This effectively blocks direct conversion of Sri Lankan rupees into digital currencies through formal banking systems.
However, criminals appear to have adapted quickly. Law enforcement sources indicate that alternative payment systems and informal networks are being used to bypass restrictions, allowing illicit funds to move offshore undetected. This has contributed to significant capital flight at a time when Sri Lanka is struggling to stabilize its economy.
Beyond individual losses, the broader economic implications are severe. Experts warn that unchecked crypto outflows weaken foreign exchange reserves, distort financial transparency, and undermine investor confidence. The lack of regulatory oversight also leaves ordinary citizens exposed to scams, with little recourse for recovery.
In response, the government is accelerating efforts to tighten oversight. Plans are underway to introduce a legal framework recognizing virtual assets as a distinct financial class, alongside stricter compliance requirements for digital service providers.
However, analysts caution that regulation alone may not be enough. Public awareness remains low, and enforcement agencies face challenges in tracking decentralized, cross-border transactions.
As Sri Lanka prepares for an international evaluation on money laundering controls in 2026, the stakes are high. The outcome will not only determine the country’s financial credibility but also its ability to contain a fast-evolving digital threat.
For now, crypto currency remains a double-edged sword offering opportunity on one side, and on the other, a growing channel for fraud draining billions from an already strained economy.
Decades of Leadership: Ranil Wickremesinghe Celebrates Birthday Today
March 24, LNW (Colombo): Former Sri Lankan President Ranil Wickremesinghe celebrated his birthday today, receiving warm wishes from political leaders, supporters, and well-wishers across the country.
Born on March 24, 1949, Wickremesinghe is one of Sri Lanka’s most experienced politicians. He was educated at Royal College, Colombo, and later at the University of Ceylon, where he studied law before entering politics at a young age.
He began his parliamentary career in 1977 and went on to hold several key ministerial portfolios. Wickremesinghe served as Prime Minister of Sri Lanka on multiple occasions and later assumed the presidency during a period of significant economic and political challenges in the country.
Throughout his long career, he has been associated with economic reforms, international engagement, and efforts to stabilize governance during times of crisis. His leadership has often been noted for its focus on policy-driven decision-making and diplomacy.
As he marks another year, many have acknowledged his decades of public service and his enduring influence on Sri Lanka’s political landscape.
Cement Prices Surge Amid Economic Strain in Sri Lanka
March 24, LNW (Colombo): The price of a bag of cement has increased sharply as the ongoing economic crisis continues to impact the construction sector, according to building material sellers.
Market sources say the price has risen by around Rs. 175, bringing the current retail cost of a single bag to approximately Rs. 2,250.
Industry insiders also report that the prices of other key construction materials, including sand and stone, have already increased, adding further pressure on builders and homeowners.
Five Arrested Over Brutal Robbery Scheme Targeting Women in Batticaloa
March 24, LNW (Colombo): Police in Kokkadicholai, along with the Eastern Province Crimes Division, have arrested five suspects, including a woman, over a series of violent robberies that left one woman dead and another injured.
The case came to light on March 20 when authorities found two women inside a well in the Kulluvinamadu area of Nellikkadu. One victim had died, while the other was rescued and admitted to hospital in Batticaloa.
Investigations revealed that the suspects targeted women travelling alone, offering them lifts in a three-wheeler. The victims were allegedly given drinks laced with a substance that caused them to lose consciousness, after which their gold jewellery was stolen.
Police said the suspects then dumped the victims into a well in an attempt to cover up the crimes. The deceased woman, a resident of Kaluwanchikudy, had gone missing on February 28 after visiting a bank and a hospital.
In a separate incident, the surviving victim was travelling with her three-year-old child when she was similarly targeted. After being robbed and thrown into the well, her child was abandoned in a paddy field in Vavunathivu, but was later found safe.
The suspects include two main individuals aged 22 and 34, along with a 26-year-old woman. Two additional men were arrested for handling the stolen jewellery, which has since been recovered. Police say further investigations are ongoing.
IRIS Dena Visited Sri Lanka on Invitation, Says Iranian Envoy
March 24, LNW (Colombo): The Iranian Ambassador to Sri Lanka, Alireza Delkhosh, stated that the warship IRIS Dena entered Sri Lankan waters at the invitation of local authorities, dismissing speculation surrounding a reported U.S. attack in the country’s Exclusive Economic Zone (EEZ). He emphasized that the vessel’s visit was not for military purposes.
Speaking at a press conference in Colombo, the envoy said the ship had participated in a peaceful exercise in India before arriving in Sri Lanka. He added that the vessel did not receive any prior warning of an attack and was not carrying weapons, claiming those onboard included members of a music band.
The Ambassador noted that under international humanitarian law, countries have a responsibility to assist ships in need, regardless of neutrality. He also claimed that 104 unarmed sailors were killed in the alleged incident, which he said occurred far from any battlefield.
He further expressed Iran’s willingness to support Sri Lanka with essential supplies, including oil, describing Sri Lanka as a friendly nation. The envoy also thanked the Sri Lankan government for its hospitality toward the remaining crew members currently in the country.
Addressing broader regional tensions, he stated that Iran would continue to take defensive measures against any threats, warning that countries supporting hostile actions could face responses.
Heavy Afternoon Showers and Thunderstorms Forecast for Western and Southern Regions (March 24)
March 24, LNW (Colombo): Showers or thundershowers will occur at several places in Western, Southern, Uva and Sabaragamuwa provinces and in Kandy and Nuwara-Eliya districts after 2.00 pm. Fairly heavy showers above 50 mm are likely at some places in Ratnapura, Galle and Matara districts.
Mainly dry weather will prevail over the other parts of the island.
Misty conditions can be expected at some places in Western, Central, Sabaragamuwa and Uva provinces and in Galle, Matara and Kurunegala districts during the early hours of the morning.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers
Fuel Shock Forces Government to adopt Market Pricing, Targeted Relief
By: Staff Writer
March 23, Colombo (LNW): Sri Lanka’s embattled fuel sector is on the brink of a decisive transformation, as authorities move to dismantle rationing systems and state-controlled pricing in favor of a market-driven model paired with targeted subsidies for vulnerable groups.
The proposed reform, discussed at a high-level meeting chaired by Anura Kumara Dissanayake, signals a major policy pivot aimed at stabilizing the energy market while shielding the most economically fragile citizens from the fallout of rising global oil prices driven by the ongoing Gulf crisis.
Finance Ministry sources confirmed that the government is preparing to raise fuel prices to more realistic levels while simultaneously introducing temporary cash support for low-income households. Officials have indicated that a subsidy program could be sustained for up to three months if required, a proposal already communicated to the International Monetary Fund, which has requested a formal report without opposing the plan.
The shift comes amid growing consensus that the fuel “QR pass” rationing system introduced during the height of the 2022 economic collapse has outlived its usefulness. While it initially helped manage severe shortages, it later gave rise to widespread distortions, including black-market trading and queue manipulation.
Energy economists argue that such administrative controls failed to address the underlying supply constraints. Instead, they effectively turned fuel access into a tradable commodity, creating informal markets and inefficiencies that undermined the system’s original intent.
At the same time, the government’s cost-reflective pricing formula has come under intense criticism for its inability to keep pace with volatile global oil prices. Delayed adjustments often resulted in mounting losses for the Ceylon Petroleum Corporation, further straining public finances.
Officials warn that Sri Lanka’s fragile fiscal position leaves little room for such inefficiencies. With global prices fluctuating sharply due to geopolitical tensions, maintaining universal subsidies or price controls is no longer viable.
As an interim step, authorities have introduced an odd-even fuel distribution system based on vehicle registration numbers to manage immediate demand pressures. However, this is widely viewed as a temporary measure while broader structural reforms take shape.
The new model centered on import parity pricing will allow private operators to determine fuel prices based on international market rates, with the government imposing only a protective ceiling. This approach is expected to improve supply stability while reducing the financial burden on the state.
International firms such as Sinopec, Lanka IOC, and RM Parks are already expanding their presence, using their own foreign exchange reserves to import fuel thereby easing pressure on the Central Bank.
Analysts say the success of this transition will depend on the government’s ability to balance market efficiency with social protection. For now, the message is clear: Sri Lanka is preparing to let the market leadwhile ensuring the most vulnerable are not left behind.
Gulf Airspace Crisis Could Transform Mattala into Strategic Hub
By: Staff Writer
March 23, Colombo (LNW): Sri Lanka’s long-struggling Mattala Rajapaksa International Airport (MRIA) may finally be on the brink of relevance, as geopolitical tensions in the Middle East disrupt global aviation patterns and create an urgent need for alternative hubs.
Recent airspace restrictions linked to regional conflict have triggered requests from major Gulf carriers such as Qatar Airways and Emirates for increased access to Sri Lanka. However, the country’s primary gateway, Bandaranaike International Airport (BIA), is already operating near capacity, handling tens of thousands of flights annually and turning away additional frequencies due to congestion.
This bottleneck has placed MRIA once labelled the “world’s emptiest airport” back into focus.
The numbers highlight both the challenge and the opportunity. In 2025, MRIA recorded its highest-ever activity, handling 140,614 passengers and 703 international flights . While this marks a notable improvement, it remains far below its designed capacity of one million passengers annually. On average, the airport currently handles fewer than two flights per day, underscoring its underutilisation.
Financially, the picture is stark. In 2024, MRIA generated just Rs. 242 million in operating income against costs of Rs. 3.6 billion, resulting in losses exceeding Rs. 3.3 billion . Cumulative losses since 2018 have surpassed Rs. 39 billion, while total losses since its opening in 2013 are estimated at around Rs. 66 billion. In simple terms, the airport earns only a fraction of what it spends.
Nevertheless, the ongoing Gulf crisis may change this equation.
MRIA’s geographic position close to major East-West flight corridors makes it an attractive contingency hub for diverted or rerouted flights. Aviation officials confirm the airport is fully operational and compliant with international standards, capable of handling wide-body aircraft. Its 3,500-metre runway can even accommodate large jets such as long-haul airliners.
However, limitations remain. Parking capacity is restricted to around 7-10 aircraft at a time, meaning the airport cannot absorb large-scale diversions without careful coordination. Even so, a moderate increase in traffic could significantly boost revenue streams through landing fees, ground handling, refuelling, and passenger services.
Beyond immediate crisis-driven demand, authorities are exploring long-term transformation. Plans are underway to attract private investment in maintenance, repair and overhaul (MRO), cargo logistics, aviation training, and hospitality services. These sectors could generate steady income independent of passenger traffic.
The Gulf conflict, while unpredictable, has effectively accelerated discussions that might otherwise have taken years. If even a portion of diverted Gulf traffic materialises, MRIA could transition from a financial burden into a strategic asset.
For the first time in years, the airport’s future may depend less on past missteps and more on how quickly Sri Lanka can seize this unexpected geopolitical opportunity.