President Anura Kumara Dissanayake says Sri Lanka must rebuild an economy strong enough to withstand both internal and external shocks, stressing that true stability is achieved only when the economy does not collapse in the face of disturbances.
He noted that Sri Lanka has already experienced several challenges in recent years, including rising tensions between India and Pakistan as an external factor, the new tax policy introduced by the United States, and an internal economic shock he referred to as “Ditwah,” which he described as the most damaging internal economic event in the country’s history.
Addressing public concerns about the government maintaining around Rs. 1.2 trillion in the Treasury account, the President explained that this reserve is necessary to ensure financial stability. He pointed out that in 2022 the Treasury had an overdraft of about Rs. 800 billion, whereas by the end of last year it held deposits amounting to approximately Rs. 1,200 billion.
According to the President, maintaining these reserves allows the government to manage benchmark interest rate controls and strengthens the country’s ability to withstand internal economic shocks, with the Treasury now functioning as the largest account holder in the financial system.
However, he warned that the country is currently facing a significant external shock due to the war in the Middle East, which has caused major disruptions to global supply chains.
He noted that global oil prices have risen sharply, increasing from around US$70 per barrel at the beginning of March to about US$100 per barrel, representing a rise of approximately 42 percent.
The President said such volatility has created global uncertainty, with insurance costs rising and some international tenders being cancelled.
“Not only us, the whole world has become victims of this uncertainty,” he said.
He also addressed public reactions to the situation, saying he does not blame citizens for rushing to fuel stations or attempting to stockpile fuel, as many people still remember the severe shortages experienced during the 2022 crisis.
Using an analogy, he said that “a person burned once fears even the glowing ember,” explaining that past experiences have made the public more sensitive to signs of possible shortages.
He noted that diesel sales rose from about 4,500 kilolitres on March 1 to around 10,500 kilolitres on March 3, while petrol sales increased from 4,000 to 9,000 kilolitres before later declining to about 6,000 kilolitres.
The President urged the public to understand that no individual can remain secure alone in such circumstances and emphasized the need for collective patience and responsibility.
He explained that the current external shock has affected global fuel markets and contributed to the recent fuel price increase.
The President also noted that a significant portion of fuel distribution in Sri Lanka is handled by private companies and international entities, making it necessary for the government to ensure conditions that support the continued functioning of all suppliers rather than relying solely on the Ceylon Petroleum Corporation.
He emphasized that fuel consumption should gradually return to normal levels, with diesel demand ideally stabilizing around the usual level of about 4,500 kilolitres per day.
Reflecting on the 2022 crisis, he said the shortages at that time were not caused by global supply chain disruptions but by the country running out of foreign currency to import fuel.
Today, however, Sri Lanka holds about US$7.2 billion in foreign reserves, meaning that any future difficulties would more likely arise from supply disruptions rather than a lack of funds to pay for imports.
He added that the government is currently discussing alternative supply routes with partner countries and companies to reduce risks.
The President stressed that ensuring uninterrupted electricity supply remains a top priority, as any disruption could severely impact the country’s economic activities.
He said discussions with the Governor of the Central Bank and other relevant officials have already taken place regarding the measures needed to maintain continuous energy supply.
According to the President, Sri Lanka can guarantee uninterrupted electricity supply for the next two months, though longer-term forecasts remain uncertain if the conflict continues.
He noted that parties involved in the war have indicated that their most powerful weapons have not yet been deployed, making it difficult even for major world powers to predict the situation if the conflict extends beyond two months.
Despite these uncertainties, the President reaffirmed that the government is committed to maintaining uninterrupted energy supplies and is putting the necessary mechanisms in place to manage potential challenges.
He also called on the public to adjust consumption patterns where possible, noting that countries facing crises have often overcome them through adaptation rather than by maintaining previous habits.
“This is not about supporting the government,” he said. “This is so that all of us can rise together from this crisis.”
