Sri Lanka Cuts Fuel Prices Following US-Iran Talks

The Government of Sri Lanka reduced fuel prices by up to six percent on June 30, 2026, marking the first price decrease since a Middle East conflict drove energy costs upward. The state-run Petroleum Corporation lowered diesel by 25 rupees per litre to 382 rupees and petrol by 20 rupees to 414 rupees.

These reductions follow a drop in international energy prices after the United States and Iran agreed to hold talks to end their conflict. This follows a period of significant economic strain; previously, Sri Lanka had raised fuel prices by nearly 50 percent and increased electricity tariffs by one-third following February 28 attacks by the U.S. and Israel on Iran.

Sri Lankan officials have cautioned the International Monetary Fund that prolonged Middle East tensions could jeopardize the country's fragile economic recovery. The nation is still working to stabilize its economy following a 2022 foreign debt default and a subsequent $2.9 billion bailout loan provided by the fund in March 2023.