Business
Sustainable fuel bill for road transport
Is there a solution?
There is a great mismatch in the spend between Sri Lanka’s total imports and fuel imports. According to available data, we have spent 3,269 million US dollars on average annually on fuel imports, between 2014 and 2018. This is as opposed to the 3,394 million US dollars spent on the country’s total imports during the same period, for other essential items like food and beverage, dairy products and medicine. What this means is that Sri Lanka spends more on fuel than food, medicine, and any other essential product. In a nutshell, our fuel bill was almost the same as what we spend to import everything else. What is salient to note is that this huge spend on fuel was at a time when a barrel of oil was at US dollars 50 — things have changed quite a bit from then.
Fuel import bill unsustainable
With the oil price increasing to US dollars 100/- per barrel, our fuel bill automatically doubles. This is entirely unsustainable, especially in light of the country’s current economic woes.
The question then, is how do we reduce this colossal amount to at least some degree? Senior Professor Amal S. Kumarage, Department of Transport and Logistics, University of Moratuwa says it is possible if one is to take a closer look at our road transport sector, which takes up approximately 63% of the total fuel import bill. “Those taking mitigatory steps to correct the current economic crisis, will have to figure out ways to reduce fuel consumption in road transport by at least 25%. Whilst it is a given that transport is the linchpin in developing the local economy, the country needs to rationalise the sector, to help us get out of this situation we are now facing.” He says what we need now is a paradigm shift, especially since Sri Lanka’s petrol price at the pump is still lower than in countries like India, Bangladesh and Nepal, whose per capita income is also 2-3 times lower than ours.
Subsidised fuel no longer
an advantage
The Moratuwa University Don says, there is simply no advantage in providing subsidies for fuel, while consumption remains so high, adding that in any case, it is not the poor who benefit from these subsidies, because the higher percentage of fuel is used by privately owned vehicles. “While fuel imports, unlike other goods, should not be restricted or rationed because it is necessary for production, it is also necessary for local prices to be pegged to world market prices. However, it should be done with a reasonable tax component that would discourage consumption and encourage alternate use. Many countries have successfully implemented this tax to develop and promote less fuel consumption without reducing productivity or convenience. Further, in the current Sri Lankan context, it will allow more funds to be allocated for goods that are vital for daily living.”
Concessionary permits: loss for country, advantage to affluent
While annual car imports keep adding to our fuel bill, another issue is the concessionary permit system provided by the government to certain state officials to import cars with tax benefits. According to statistics, the concessionary permit system is a huge loss annually to the country. “The loss from these concessionary imports of private cars to the Treasury averages Rs. 94 billion per annum. This figure is almost equal to the LKR 97 billion per annum the Treasury gathers from all car imports, which actually makes the taxation process a pointless exercise. Furthermore, because of the tax concession, permit holders tend to go for more expensive vehicles in consideration of the resale value and more often than not, these expensive choices are heavy on fuel consumption.
Need to review transport sector
8% of Sri Lanka’s total import bill has been for road vehicles, and another 10% spent on fuelling them at $50 a barrel (Sri Lanka Customs, Import Data, 2022) and a further 3-4% was spent on road construction. At current oil prices use of road vehicles will take up more than half of our total import cost for consumables. Given that, reviewing the transport sector sooner rather than later is vital and would give Sri Lanka a much needed way out. A streamlined, manageable transport and logistics sector would be a driver for Sri Lanka’s economic revival and long-term regeneration. While it is necessary to find a solution to the immediate issues faced by the people, a sustainable long term plan needs to be put in place to avoid the heavy dollar expenditure of our road transportation and highway network system.
Potential long term plan
Therefore, if rationing fuel is not the answer, how do we manage our fuel bill more effectively in the present? The answer, Professor Kumarage says, is to have less cars on the road by improving public transport. “Sri Lanka’s current public transport carries 50% of trips using just 16% of the fuel used for road passenger transport. Less cars on the road means less congestion, less pollution and less fuel consumption. How we travel and purchase goods has changed with the pandemic situation and with the increased use of cab and delivery services, solutions should also be looked at in these areas. Encouraging short distance deliveries on cycles instead of motorcycles should be considered. Another way we can reduce cars on the road is by making ride sharing systems compulsory. That will reduce private vehicle usage and increase reliable online services to eliminate unproductive physical travel. Introducing a system where cars are allowed on the roads on alternate days, imposing a peak-period minimum passenger occupancy in selected traffic attracting areas such as Fort, Battaramulla and Nawam Mawatha, incentivising company transport services can all help in reducing road traffic.” To start off, Sri Lanka like some other countries can introduce a car free day as a symbol of our policy change, says the professor.
Policy readjustments such as scrapping the concessionary vehicle permit system, allowing concessions only for electric vehicles, modernising our public transport to match the 21st century user, and implementing a moratorium on our highway development system would all work to make a significant impact on reducing the import bill and saving our valuable dollars.
Business
Cost-effective clearance of goods across borders to determine worth of Customs Paperless Declaration
By Ifham Nizam
The introduction of the Customs Paperless Declaration from October 1 could mark an important step in Sri Lanka’s efforts to modernise trade, but its real value will depend on whether it reduces the time and cost of moving goods through the country’s borders, Customs House Agents & Traders Association President Mohamed Niyas said.
Niyas warned that digitising Customs declarations alone would not necessarily translate into faster cargo clearance or lower costs for businesses.
‘Expecting a dramatic improvement in clearance speed under the present conditions is like expecting Ferrari performance from a Morris Minor configuration, he said.
For importers and exporters, the issue extends well beyond paperwork. Every additional hour or day that cargo remains in the clearance chain can have wider consequences for businesses, including increased port and storage-related costs, additional working-capital requirements, uncertainty over delivery schedules and disruptions to production and distribution.
Niyas said the competitiveness of Sri Lanka’s trading sector ultimately depended on how efficiently goods could move through the country’s border-clearance system.
‘The real bottleneck is not merely the absence of paper. It is the entire clearance ecosystem—the limitations of the existing ASYCUDA World system, excessive regulatory interventions by Other
Government Agencies, multiple approvals, physical examinations, manual interventions, fragmented processes and institutional constraints, he said.
He cautioned that unless these bottlenecks were addressed, there was a risk that the paperless initiative would merely digitise existing bureaucracy.
‘If these underlying constraints remain unchanged, there is a real risk that the new paperless system could become another “copy-and-paste road show”—where an old, complex clearance process is simply transferred onto a digital screen without fundamentally changing the process itself, Niyas said.
For businesses dependent on imported raw materials, machinery, components and other inputs, clearance efficiency can directly affect the wider supply chain.
Delays at the border can create uncertainty for manufacturers, distributors and retailers, while exporters can face difficulties meeting delivery schedules when imported inputs or export consignments are held up.
Niyas therefore argued that the success of the October 1 initiative should be judged by its impact on trade flows rather than by the number of declarations processed electronically.
‘Paperless does not automatically mean faster, he said. ‘Digitising a slow process does not make the process fast. It only makes the slow process digital.’
He said Sri Lanka needed to move towards what he described as “process-less Customs”—a system in which unnecessary procedures are eliminated rather than simply converted into electronic procedures.
Among the reforms he called for are simplification of Customs declarations and approval workflows, improvements to the functionality of ASYCUDA World, greater use of risk-based inspections and better integration of Other Government Agency approvals.
Niyas also called for the elimination of repetitive document submissions and physical endorsements, greater use of pre-arrival processing, sufficient capacity for digital document uploads and clearly defined service-level timelines for Customs and OGAs.
Business
China backs Sri Lanka’s Non-aligned stance to counter regional pressures
By Sanath Nanayakkare
As global attention has fixed on the high-level diplomatic choreography at the United Nations General Assembly in New York, a subtler, yet profound geopolitical signal was sent from Colombo, yesterday.
In a major address marking the founding anniversary of the People’s Republic of China, newly appointed Chinese Ambassador Wei Huaxiang chose to anchor bilateral relations not just in modern trade or infrastructure, but in a shared respect for Sri Lanka’s legacy of non-aligned independence.
By explicitly invoking Sri Lanka’s foundational role in the 1976 Non-Aligned Summit, Beijing was doing something unexpected in an era defined by fierce great-power rivalry: it was officially validating a small island nation’s right to maintain an independent foreign policy stance.
The Strategic Value of Independence
For decades, nations caught in the crosshairs of major-power competition have faced intense pressure to pick sides. Yet, Ambassador Wei’s embrace of Colombo’s non-aligned tradition signaled a different diplomatic playbook. Instead of demanding alignment, Beijing was framing its partnership as a reliable counterbalance to regional pressures. By honouring Sri Lanka’s diplomatic autonomy, China was effectively reassuring smaller economies that sovereign independence and robust economic cooperation can coexist.
Beyond Ports and Industrial Zones
This diplomatic framing reframed the narrative surrounding major collaborative ventures like the Colombo Port City and Hambantota Port. While foreign analysts often view these projects exclusively through the lens of strategic rivalry, Beijing’s diplomatic messaging tied them back to a historical ethos of solidarity—evoking memories of the 1952 Rubber-Rice Pact.
By marrying economic projects with a stated respect for non-alignment, China is positioning itself as a steadfast stakeholder that respects Sri Lanka’s internal agency during difficult economic and political seasons.
As both nations look toward major milestones in 2027—including the 70th anniversary of diplomatic ties—this nuanced diplomatic move revealed how historic traditions are being leveraged to navigate modern multipolar realities.
For global observers, the takeaway was clear: in the shifting architecture of Asian geopolitics, respecting a nation’s historical neutrality may just be the most effective way to secure a lasting partnership, a diplomatic masterclass that Ambassador Wei Huaxiang executed in style.
Business
Sri Lanka Insurance Life appoints Dr. Sameera Dharmasena Chief Executive Officer
Sri Lanka Insurance Life (SLIC Life), the nation’s largest and strongest Life Insurer, is pleased to announce the appointment of Dr. Sameera Dharmasena as its new Chief Executive Officer, effective 22nd September 2026.
Dr. Dharmasena is a distinguished insurance professional with over 21 years of experience in the Sri Lankan insurance industry, having held senior leadership positions across several leading insurance companies affiliated with some of Sri Lanka’s largest business conglomerates. His extensive career spans both local and multinational insurance environments, bringing together broad industry expertise, strategic leadership and a strong commitment to the advancement of the insurance profession.
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