IMF did not reject fresh proposal: Energy Minister

By the Editorial Team · Sunday, September 27, 2026

Sri Lanka’s Energy Ministry stated that the IMF has not rejected the government’s proposal to extend the energy subsidy scheme amid rising fuel prices, and negotiations for a temporary postponement of the planned subsidy phase-out are ongoing. This extension aims to ease the financial burden on consumers while the government and IMF work toward a sustainable subsidy framework and structural reforms.

Sri Lanka’s Energy Ministry has clarified that the International Monetary Fund (IMF) has not rejected the government’s recent proposal seeking to extend the energy subsidy scheme amid rising fuel prices. The proposal, submitted by President Ranil Wickremesinghe, aims to secure additional funds to cushion the impact of escalating retail fuel costs on consumers.

According to Ministry of Energy Secretary C.M.D. Apeiron Spiri and officials from Sri Lanka Podjantana, discussions with the IMF continue regarding a temporary extension of the subsidy program, which currently involves Rs. 46.40 billion allocated for energy subsidies. While the precise amount and the implementation timeline remain under negotiation, the government is exploring the most practical measures to mitigate the financial pressure on households and businesses.

The Energy Ministry is reportedly seeking the IMF’s approval to temporarily postpone the planned phase-out of fuel subsidies, initially scheduled for the end of September. This postponement would allow the government additional time to manage the shock of recent fuel price increases, which have strained both the national economy and consumer finances.

Details remain limited on the exact terms of the proposal. However, reports indicate that the submission includes offers to adjust retail fuel pricing mechanisms, with discussions involving a proposed price increase ranging from 40 to 50 cents for certain categories and between 80 to 90 cents for others. The proposal also features ongoing talks with parliamentary bodies and judiciary representatives concerning the adjustments in pricing and subsidy allocations.

While some members of the parliamentary committee endorse a moderate increase in fuel prices this year, others emphasize the need for a fixed formula to manage future price adjustments transparently. The government’s approach is reportedly designed to balance fiscal responsibility with the need to protect vulnerable groups from abrupt economic shocks.

The IMF has yet to formally approve any new subsidy extension, and negotiations are ongoing. Both the Sri Lankan government and the IMF are working toward a mutually acceptable framework that supports economic stability while progressing on structural reforms aimed at long-term sustainability.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.