The Hon. Anura Kumara Dissanayake — President, Minister of Defence, Minister of Finance, Planning and Economic Development, and Minister of Digital Economy

¶ 01 Hon. Speaker, I wish to present a few matters regarding the ongoing war situation in the Middle East and how it could impact Sri Lanka economically and socially.

¶ 02 Our position is that no war benefits any people. Modern high-technology weapons are devastating, as we all can see. Therefore, Sri Lanka urges all parties to swiftly commit to a peaceful world.

¶ 03 This conflict may immediately affect our energy supplies—oil and gas; the wellbeing of Sri Lankans working abroad in the region; tourism and remittances—key contributors to our economy; shipping and aviation services. We must have both short-term measures to shield people and long-term pathways to manage the crisis.

¶ 04 Our people are understandably anxious due to recent painful memories—long queues for gas and fuel, even deaths in queues, medicine shortages, and transport disruptions. Words alone cannot stabilize society; we must practically ensure people do not face crises.

¶ 05 Fuel: Our main constraint is storage capacity. Excluding Trincomalee’s Lanka IOC tanks, Kolonnawa and Muthurajawela together hold about 150,000 MT. Stocks cannot be kept full because we must clear space for arriving ships and daily refinery output. Of the 150,000 MT, about 103,000 MT was filled at the relevant time. Daily refinery output is about 1,800 MT and requires storage allocation. Based on management of receipts, issues to market, and ship schedules, we currently hold around 33 days of diesel.

¶ 06 For petrol, total capacity is 161,087 MT; about 136,270 MT was filled when concerns arose. Again, operations and reserve stocks share the same tanks; Sri Lanka has no separate strategic reserves. With an additional 35,000 MT petrol cargo due around the 7th–8th, we expect close to 40 days of petrol, under a scientific storage and delivery plan aligned to ship arrivals and daily issues.

¶ 07 Jet A-1: Daily demand is around 1,800 MT; refinery produces about 1,080 MT; the balance is imported. Combining inventory and booked imports, we have about 49 days. Incoming ships are scheduled: RM Parks (14th), Sinopec (17th), IOC (21st), and Ceypetco (28th); all loads have been confirmed.

¶ 08 Crude oil: Current crude covers 26 days; an incoming crude cargo adds 18 days, totaling about 44 days even if no further ships arrive. Based on current trajectories, there should be no immediate fuel crisis. If the war escalates dramatically—including attacks on refineries globally—impacts could change; we will plan for scenarios accordingly.

¶ 09 Medium-term infrastructure: We are expanding storage and pipelines.

¶ 10 - Kolonnawa: Building 6 new tanks and replacing 2 old (fire-damaged) tanks—8 new tanks total—adding 86,000 MT capacity by 2027; cost approx. Rs. 5 billion (Rs. 3.328 bn for six; Rs. 1.45 bn for two). - Muthurajawela: Adding 40,000 MT capacity; tender in final stage; approx. Rs. 3.5 billion. - Pipeline Muthurajawela–Katunayake for Jet A-1; expand Jet A-1 storage by 63,000 MT; tender in final stage; approx. Rs. 16 billion; will support aviation hub ambitions. - Trincomalee: Of 24 tanks previously under our control, three were given to PRIMA; 21 remain. We selected four tanks for Phase 1 rehabilitation—two completed, two ongoing—and are tendering a new marine pipeline; approx. Rs. 7.378 billion. Adds about 40,000 MT. - Gantry automation and loading: Automating to cut vessel discharge/turnaround from about five days to two; approx. Rs. 1.5 billion. - Refinery expansion: Built in 1969 for 38,000 bpd; expanded in 1979 by 12,000 bpd to 50,000 bpd; no increase for 47 years. We plan to double to 100,000 bpd with state participation and private investment; Expressions of Interest received from about 20 companies; model under discussion. - Kolonnawa–Muthurajawela product pipelines: Replace ~90-year-old lines; two new lines (14-inch and 18-inch); tenders to be called; approx. Rs. 12.8 billion. - Naphtha pipeline Kolonnawa–Kelanitissa: Replace ~90-year-old line; tender nearing final; approx. Rs. 1.5 billion.

¶ 11 In total, over Rs. 30 billion is being invested to strengthen fuel infrastructure.

¶ 12 LPG: Total national LPG storage is only about 8,000 MT, while Litro’s daily demand is 1,000–1,200 MT (recently up to 1,800 MT when the private supplier curtailed supply). With such low storage, we have barely five days’ cover. Presently, a mother vessel is positioned off Maldives; we lighter about 8,000 MT every other day by small vessels—a suboptimal interim measure. We have engaged a private company with a 30,000 MT export-oriented storage terminal (in Hambantota) to temporarily allocate 15,000 MT for domestic use, subject to applicable taxes since it is a BOI export facility. This is to address the segment of customers with yellow cylinders who have faced shortages because the BOI operator could only supply up to 20% to the local market tied to their export volumes—which have collapsed due to regional issues. Under Emergency Regulations, through the Commissioner of Essential Services, we will temporarily allow higher local market allocation with all due taxes. Litro has also ordered 100,000 new cylinders, expected around the 12th of this month, to facilitate customers switching from higher-priced yellow cylinders to blue cylinders; we have not increased retail prices.

¶ 13 Overseas Sri Lankans in the Middle East: We have activated 24/7 hotlines in our Missions, the Foreign Employment Bureau, and the Ministry of Foreign Affairs. Families in Sri Lanka can report concerns to these centers for coordination with Missions. We are also assessing options for evacuation or assistance should conditions worsen, including through international coordination.

¶ 14 Tourism: We had expected close to 300,000 arrivals in March; some cancellations are being reported. We have decided to grant, free of charge, a two-week visa extension to affected visitors. A plan is in place, developed with the Presidential Secretariat, Ministries of Foreign Affairs, Foreign Employment and Tourism, and industry representatives, to support tourists currently in Sri Lanka.

¶ 15 Ports and aviation: Some carriers have requested to position containers at Colombo due to inaccessibility of Middle East ports; we will assess capacity and require firm timelines to avoid dumping. Exporters are advised not to move cargo destined for non-operational Middle East ports to Colombo until those ports resume operations. Airports are accommodating aircraft parking requests and SriLankan Airlines is coordinating passenger transfers where possible.

¶ 16 External sector risks: Remittances were a record USD 8.2 billion last year; tourism is recovering. Both could face headwinds if the conflict escalates. Exports may be affected directly to conflict markets and indirectly via global slowdown. The Central Bank is assessing macro-financial impacts; the Ministry of Finance is preparing contingency frameworks. We aim to safeguard foreign reserves and external stability with short-term mitigation and long-term resilience measures. Relevant institutions—the CPC, Litro, Foreign Employment Bureau, Ministry of Foreign Affairs, Presidential Secretariat, Ministry of Finance, Central Bank and others—are actively engaged.

¶ 17 We hope for a swift de-escalation, but prepare for adverse scenarios.

¶ 18 Thank you, Hon. Speaker.