Sri Lanka has reinstated fuel rationing and raised fuel prices by about 33 percent following the outbreak of war between the United States, Israel, and Iran on February 28. Iran’s decision to halt most traffic through the Strait of Hormuz, a key route for 20 percent of global oil and gas, has severely disrupted supplies to the island nation, which imports 60 percent of its energy needs through the strait. The government has introduced a QR-based rationing system similar to that used during the 2022 economic crisis, limiting weekly fuel allocations for vehicles and implementing a no-work-on-Wednesday policy to conserve fuel.

Officials say the government is absorbing part of the international price increase, resulting in monthly losses of $63 million. Bus fares have risen by more than 12 percent, while liquefied petroleum gas prices are up 8 percent. Negotiations are under way with Russia for fuel imports, and Sri Lanka has declined Iran’s offer due to lack of transport capacity. Experts warn that continued disruption could raise food prices by 15 percent and threaten food security, as fertiliser supplies are also affected.

President Anura Dissanayake’s administration is expanding storage capacity and pursuing agreements with India and the UAE to renovate facilities, but economists caution that the crisis’s duration remains unpredictable.