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

Mr. Speaker, I wish to set out several points on the ongoing conflict in the Middle East, and how it affects Sri Lanka economically and socially. Our position is that war benefits no people. The destructive power of modern weapons is plain to all. All parties must urgently commit to a peaceful world. This situation threatens the global economy and human life; Sri Lanka cannot insulate itself. As we prepare domestically, only a concerted international commitment to peace can truly address it. Immediately, several sectors are impacted: energy (oil and gas), the large number of Sri Lankans working in the region, tourism and remittances, shipping and aviation. We must have a programme both for long‑term resolution and for short‑term mitigation so our people are not harmed and the country is not overwhelmed. Our people are understandably anxious, given the very recent memories of gas and fuel shortages, queues and even deaths in queues, and medicine shortages and transport paralysis. Words alone cannot stabilize society; we must practically assure people they will not face a crisis. Fuel Our main constraint is storage capacity. We do not have buffer capacity to hold two to three months of fuel. Excluding Trincomalee’s Lanka IOC tanks, the total usable capacity at Kolonnawa and Muthurajawela is about 150,000 MT—and we cannot keep all of it full because we must empty tanks in time to receive incoming ships. As of this week, about 103,000 MT was in storage. Our refinery supplies about 1,800 MT per day, which must be accommodated in our storage plan along with daily market issues and scheduled ship arrivals. Managed properly, we have: - Diesel: about 33 days of demand in stock. - Petrol: total storage capacity 161,087 MT; stocks at the onset of this situation were 136,270 MT. With a further 35,000 MT petrol ship due around the 7th–8th, we expect around 40 days of petrol cover. - Jet A‑1: daily requirement about 1,800 MT; refinery output about 1,080 MT; the balance is imported. Combining local production and imports, we have about 49 days’ cover—with replenishment voyages already scheduled and confirmed as loaded: - RM Parks: vessel ETA on the 14th - SINOPEC: vessel ETA on the 17th - IOC: vessel ETA on the 21st - CPC: vessel ETA on the 28th Crude oil for the refinery: current inventory is about 26 days; an additional crude cargo en route adds roughly 18 days on arrival, giving about 44 days of crude at current throughput, with further cargoes scheduled. If the conflict escalates severely—for example, if refineries or supply chains in the region are struck—no country is completely immune. But for the situation as it stands, our plans suffice, and we are preparing contingent plans for plausible escalations. Infrastructure strengthening (underway/planned) - Kolonnawa tank farm expansion: 8 new tanks (6 new + replacing 2 old), adding 86,000 MT capacity by January 2027; estimated cost Rs. 5 billion (Rs. 3.32 bn for 6 tanks; Rs. 1.45 bn for 2). - Muthurajawela tank farm: add 40,000 MT storage; tender at final stage; estimated cost Rs. 3.5 bn. - Pipeline Muthurajawela–Katunayake for Jet A‑1; increase Jet A‑1 storage by 63,000 MT; tender at final stage; estimated cost Rs. 16 bn. This supports plans to develop our airports as hubs, especially for cargo. - Trincomalee tanks: out of 24 tanks under our control (3 were leased to Prima by a previous Government), we are rehabilitating in phases; 4 selected in phase 1 (2 complete, 2 ongoing). New marine pipelines from offshore to shore are being tendered; estimated cost Rs. 7.37 bn. This will add about 40,000 MT of capacity as tanks come online. - Gantry/terminal automation to speed discharge and loading (reducing typical 5 days to around 2); estimated cost Rs. 1.5 bn; tender to be called. - Refinery expansion: built in 1968 for 38,000 bpd, expanded in 1979 to 50,000 bpd; no capacity increase in 47 years. We have called for Expressions of Interest to double to 100,000 bpd, with 20 companies responding; we are evaluating models that retain a State stake while leveraging private capacity. - New product pipelines: two new lines (14” and 18”) to replace 90‑year‑old leaking, hazardous lines; estimated cost Rs. 12.8 bn; tenders imminent. - Naphtha pipeline Kolonnawa–Kelanitissa (also ~90 years old), recently causing injuries; tenders at final stage; estimated cost Rs. 1.5 bn. Liquefied Petroleum Gas (LPG) - National LPG storage is only about 8,000 MT. Litro’s normal daily demand is 1,000–1,200 MT; when a private supplier curtailed supply, Litro had to supply ~1,800 MT/day—meaning less than five days’ storage cover. - To bridge this, we negotiated with a private BOI export‑oriented LPG terminal at Hambantota (30,000 MT total storage) to make 15,000 MT available temporarily for the local market. As it is a BOI/export facility, applicable taxes will be paid for local issue. - The BOI approval allows only up to 20% of exported volume to be sold locally; with exports fallen, they cannot meet even that. Therefore, under Emergency Regulations, through the Commissioner of Essential Services, we will issue a special regulation permitting temporary local supply beyond the 20% cap, with all due taxes paid, to serve the ~20% of consumers with yellow cylinders. - Litro has also ordered 100,000 new cylinders; the vessel is expected around the 12th. Overseas Sri Lankans - 24/7 hotlines are operational at all Missions, the Ministry of Foreign Affairs, and the Sri Lanka Bureau of Foreign Employment (SLBFE). Any Sri Lankan can notify these centers regarding loved ones in affected countries; Missions will intervene as needed. Tourism - We expect around 300,000 arrivals in March; some cancellations and disruptions are reported. The Government will grant a free two‑week visa extension for affected tourists. We have met with the Presidential Secretariat, MFA, SLBFE, Tourism Ministry, and hotel industry to ensure visitor safety. Ports and aviation - Some carriers request temporary container storage at Colombo due to Middle East port closures. We will consider capacity and require firm re‑export timelines to avoid dumping. - Several aircraft have requested to park at our airports; we are facilitating. SriLankan Airlines is working to connect displaced passengers. Macro‑economic risks - Remittances: last year’s US$ 8.2 billion—the highest in history—could be affected if conflict escalates. - Tourism: many source markets connect via Doha, Abu Dhabi and Dubai (Qatar Airways, Etihad, Emirates); disruptions here and global economic stress can dampen travel demand. - Exports: direct declines to conflict zones and indirect declines from global downturns are possible. The Central Bank is analyzing potential impacts and will report imminently. The Ministry of Finance and other agencies are preparing policy responses. Relevant institutions—the CPC, Litro Gas, SLBFE, MFA, Central Bank and others—are actively engaged. Our hope is for a rapid easing of tensions; we prepare for the worst while expecting the best. Thank you, Mr. Speaker.