Cabinet to Decide on Rs. 41 Bn Fuel Subsidy Amid Rising Global Prices 📈

• Overview: The Cabinet will decide today on a proposed Rs. 41 Bn fuel subsidy covering the next three months. The scheme allocates ~Rs. 13.7 Bn/month to buffer domestic consumers from surging world oil prices caused by Middle East conflict escalation. This follows a previous Rs. 57 Bn subsidy package (Rs. 19 Bn/month) for April–June. • Global vs. Local Price Surge: • Singapore Petrol Benchmark: Averaged $134.50/bbl in Sept, up 21.3% MoM and 78.7% above pre-war (Feb) levels—hitting a 2026 high. • Diesel Benchmark: Gas oil (500 ppm) reached $170.99/bbl in Sept, up 10.9% MoM and 92.5% above Feb. • Domestic Pump Prices: Lanka Petrol 92 (Rs. 399/L) and Auto Diesel (Rs. 382/L) remain only 36.2% and 35.9% above pre-war levels, respectively, shielded by price cuts on 31 Aug and past subsidies. • Economic Context: The reduced subsidy allocation balances fiscal limits against rising energy import costs, directly impacting key domestic sectors like transportation, logistics, and energy-dependent industries.