On May 31, 2026, Sri Lanka announced a fuel price increase of up to 6%, aligning with the International Monetary Fund's (IMF) directives to recover energy costs and phase out subsidies. Petrol prices rose to 434 SLR ($1.33) per litre, while diesel prices increased to 407 SLR. This adjustment follows the IMF's release of a $695 million installment from a $2.9 billion bailout aimed at stabilizing the country’s economy, which has been severely impacted by a global energy crisis triggered by conflicts in West Asia. President Anura Kumara Dissanayake confirmed in a letter to the IMF that fuel subsidies will be phased out by September 2026. Since the beginning of the conflict in February, Sri Lanka has seen a 48% increase in fuel prices, alongside a 33% rise in electricity costs. The ongoing geopolitical tensions, particularly in the Strait of Hormuz, which is crucial for global oil exports, pose significant risks to Sri Lanka's recovery efforts following its economic meltdown in 2022, when it defaulted on $46 billion in foreign debt.