Sri Lanka has unveiled an unprecedented relief package valued at £242 million designed to aid farmers, fishermen, and low-income families grappling with escalating energy expenses exacerbated by the ongoing conflict in the Middle East. Announced on Tuesday, this initiative represents the largest financial assistance program ever launched by the state.
President Anura Kumara Dissanayake highlighted that the relief effort aims to support the most vulnerable segments of the island’s population, which numbers around 22 million. He explained that direct cash transfers would be made to the bank accounts of thousands of fishermen, as well as rice and tea farmers, to alleviate their financial burdens.
In addition, those living below the poverty line—approximately a quarter of the nation’s citizens—can expect to receive an extra £19 this month, a gesture timed to coincide with the Sinhala and Tamil New Year celebrations. Furthermore, these households will benefit from subsidized electricity bills, providing a much-needed reprieve from rising costs.
President Dissanayake stated, “The total relief package is valued at 100 billion rupees over three months,” and assured that this ambitious endeavor will be supported through the current budget. This strategic allocation underscores the government’s commitment to cushioning its citizens against the challenging economic climate.
‘The total relief package is valued at 100 billion rupees over three months,’ Dissanayake said, adding ‘We are funding this through the existing budget.’
He said the government was keen to avoid a repeat of the 2022 meltdown, when the country saw record inflation of 70 percent after the government printed money to fund subsidies.
Sri Lanka is still on an IMF bailout programme that began in early 2023 when it secured a £2.2billion loan spread over four years.
Dissanayake said he was hopeful of drawing down the next tranche of about £529million from the IMF by the end of next month, following the conclusion of a staff-level agreement with the Washington-based lender this week.
Under the latest scheme, fishermen using smaller boats will get up to about £227 a month fuel subsidy, while operators of bigger boats will get about £365 a month for three months.
For farmers, the government will absorb about 30 percent of the cost of urea fertiliser, he said, adding that the state will also bear part of electricity generation costs, up to 15 billion rupees.
He said the government was keen to ensure continuity of supplies and was in talks with Russia to resume imports of gas, coal, fuel and fertiliser previously hit by US sanctions.
‘We have a window until April 11 to secure supplies from Russia after President Trump temporarily lifted sanctions,’ Dissanayake said.
Sri Lanka has increased fuel prices by a third while raising electricity tariffs by up to 40% since the start of the US-Israeli attacks against Iran on February 28.
A four-day working week introduced last month will be discontinued this week, as officials said the Wednesday day off had not led to expected energy savings.
The South Asian nation imports all its coal, gas and petroleum requirements and is heavily dependent on oil from the Middle East.
