Friday 13th March, 2026

US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu have not been able to stabilise the global oil market with their rhetoric and assurances. Their airstrikes on Iran’s naval ships, and mine-laying vessels, etc., have not helped make the Strait of Hormuz safe for international navigation. Iran has attacked six ships so far in that vital choke point. Oil prices began to climb again yesterday despite the release of 400 million barrels of oil, as part of a coordinated International Energy Agency action involving several countries. The US announced that it alone would release as many as 172 million barrels of oil to stabilise the market.

Having carried out successful attacks on vessels passing through the Hormuz Strait and sent the global oil market into panic mode, Iran now says it will stop attacks only on several conditions—end of US-Israeli military attacks, a binding guarantee that there will be no future strikes, recognition of Iran’s sovereign rights, and compensation for war damage. The US and Israel have ignored these conditions.

Prudence demands that Sri Lanka brace itself for an energy crisis. But the JVP-NPP government is all at sea, and its response to the crisis appears to be all over the place. It is apparently labouring under the misconception that it will be able to reduce fuel consumption and manage the crisis simply by jacking up prices. There’s no shame in rationing fuel during a global crisis, as we argued in a previous editorial comment. The previous government introduced a QR based fuel rationing system, which helped it not only overcome a crippling fuel crisis but also retain its hold on power. In fact, some economic advisors reportedly pushed for fuel rationing to prevent a crisis in early 2022, but the Rajapaksas ignored their counsel only to head for the hills with angry protesters in close pursuit a couple of months later.

Minister Wasantha Samarasinghe has claimed that recent panic buying and hoarding of fuel led to a depletion of the country’s petroleum reserves. His claim should be taken with a pinch of salt, for he is trying to justify the huge fuel price increases, but the government could have controlled that situation by resorting to QR-based fuel sales. The same method can be used to prevent many people from using extra gas cylinders to stock up on LPG at the expense of others. Some Litro agents themselves are known to hoard gas and sell it at a black market premium.

Thailand has said its energy reserves are sufficient for about 95 days, but it has already adopted emergency measures to curtail energy consumption. Many other countries have done the same. Pakistan has set an example worthy of emulation. The emergency fuel crisis management measures adopted by Pakistan include a four-day work week for state institutions, work from home for about half of employees in public and private sectors, except essential services, temporary closure of schools and universities, the introduction of online learning, 50% cut in fuel allocations for state vehicles besides the removal of around 60 percent of official vehicles off the road, restrictions on official travel and encouragement of virtual meetings in government institutions. Sri Lanka should learn from Pakistan’s fuel-saving approach.

In this country, no opening ceremony is considered complete without the presence of either the President or the Prime Minister or a Cabinet Minister. We have had Presidents, Prime Ministers and ministers travelling all over the country, attending various ceremonies and meetings all these years; the incumbent rulers are no exception. The President, the Prime Minister and ministers can inaugurate projects and attend meetings remotely, and help save a lot of fuel and millions of rupees spent on security arrangements, etc. Why should the President travel all the way from Colombo to faraway places to attend District Coordination Committee meetings when he can address them online? Government politicians and officials ought to stop running around like headless chickens and help save fuel and state funds.

It is high time the government stopped dilly-dallying and introduced QR-based fuel rationing.

Thursday 12th March, 2026

It is not possible to predict who will emerge victorious in the ongoing war in the Middle East or whether the conflict will end without a clear winner though US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu would have the world believe that they will surely be the winners. The US-Israel military power is doubtlessly far superior to that of Iran, but in a war of this nature, military might alone does not guarantee a clear victory.

Difficult as it may be to predict who will win in the current Gulf conflict, the overall loser is already known; it is the world economy. Global markets are heavily reliant on President Trump’s assurance that the war will not last long, and the release of the G7 strategic oil reserves to stabilise the world oil supply. But Trump’s most intense airstrikes on Tuesday have not yielded the desired results. Iran remains defiant and has raised the stakes for the global economy by threatening to bring oil exports from the region through the Strait of Hormuz to a complete halt unless the US and Israel stop attacks. It continues to fire missiles and carry out drone attacks on US interests in the region. Trump has announced that the US will seriously consider providing security to the ships sailing through the Hormuz Strait, but whether the US is equal to the task is the question. It is being argued in some quarters that Trump and Netanyahu have already bitten off more than they can chew.

There is reason to believe that Trump went to war with Iran without a proper assessment of the ground situation. His plan was to make short work of the current Iranian regime with shock-and-awe aerial bombardments and the assassination of Iranian Supreme Leader Ayatollah Ali Khamenei, but his plan has apparently gone awry. The slain Iranian leader’s son has been elected the Supreme Leader. Trump may have expected the Iranian anti-government protesters to make the most of the ongoing bombing spree, come out in their millions and bring down their embattled regime, but they are silent today. Perhaps, they are too scared to challenge the beleaguered regime, which has warned that ‘every soldier has his finger on the trigger’ and protesters will be treated as traitors. It is also possible that the protesters are now disillusioned with the US after realising that Washington has sought to use them as a cat’s paw in its efforts to grab Iran’s oil resources.

Has the US made, in Iran, a military miscalculation similar to the one in Afghanistan? The US Intelligence community and the military estimated that Kabul was resilient enough to hold out for several months after the withdrawal of the US troops in 2021. But that city fell to the Taliban in days, causing the then US President Joe Biden to admit that the collapse had happened “more quickly than the US had anticipated”.

Iran may not have anticipated a joint US-Israel military operation of this magnitude. It remains to be seen whether Iran can sustain its missile and drone attacks vis-à-vis the US-Israeli air strikes on its arms stockpiles and military installations. However, what one gathers from the views of military analysts is that it is very unlikely that President Trump will go so far as to deploy ground troops in Iran, with about 59% of Americans opposing his war, according to opinion surveys. In its war for oil in Iraq, the US had the backing of a much broader international coalition.

Nothing could be more humiliating to the US than Washington’s call for help from Ukraine to deal with the Iranian drones. Ukrainian President Volodymyr Zelensky, whom President Trump once showed the door during a White House meeting, has confirmed that the US sought his help to defend its allies in the Persian Gulf against the Iranian drones. Did Trump start a war without a proper assessment of the enemy’s drone capability?

The enormous economic cost of the Middle East conflict will have to be borne by not only the parties thereto but also by the entire world. Trump’s assurances and the G7 responses have prevented panic in global markets, but unless the US and Israel end the war soon and take steps to keep the Strait of Hormuz functional, oil prices will soar again, pushing the world closer to a global recession. If Trump and Netanyahu stop their war midway, they will face a domestic political backlash. Trump and Netanyahu have the Epstein files and corruption charges to contend with, respectively. The Trump administration is facing midterm elections in November. Politically speaking, Trump and Netanyahu are on a tiger ride in the Middle East.

The biggest challenge before the US and Israel in the ongoing conflict is to prevent Iran from shifting the war to the economic front, and make the global economy scream.

Wednesday 11th March, 2026

There can be no bigger affront to Karl Marx’s legacy than the JVP’s claim that it espouses Marxism. Marx envisioned the creation of a future society free from exploitation. The latest fuel price hikes announced by the JVP-led NPP run counter to the Marxist principle of freedom from exploitation.

The sudden fuel price hikes, which have come close on the heels of the monthly fuel price revision announced on 28 February, cannot be considered legal, for they are not consistent with the Cabinet-approved fuel pricing formula. The government insisted during the recent panic buying and hoarding of fuel that the existing petroleum stocks were sufficient for more than one month, and there was no need for the public to queue up outside filling stations.

Chairman of the Ceylon Petroleum Corporation (CPC) D. J. Rajakaruna, flanked by Cabinet Spokesman Dr. Nalinda Jayatissa, gave an assurance, at a recent post-Cabinet media briefing, that the local fuel prices would not be increased in view of the global situation at least for another month or two. The fuel price revision on 28 February is proof that neither the CPC nor the Indian Oil Company (IOC) nor Sinopec purchased fuel at the current world market prices. Minister Jayatissa has reportedly claimed that fuel consumption has risen sharply over the past several days, leading to a drop in the existing reserves, and fuel had to be procured at higher global market prices. There is no way the government can justify jacking up fuel prices because the CPC prices revised on 28 February were cost reflective, and fuel stocks currently being released to the market were procured at much lower prices. Therefore, the latest fuel price increases are nothing but unfair and irrational. The motive of the government is to maximise profit at the expense of the public.

A CPC Director also made a vain attempt yesterday to justify the fuel price hikes. He said that by increasing the prices of the existing petroleum stocks, the government had sought to prevent a massive price hike upon the arrival of new fuel shipments. His flawed logic is an insult to the intelligence of the public. It is doubtful whether he was aware that oil had dropped to USD 90 per barrel from USD 119 per barrel in the world market overnight as US President Donald Trump predicted that his war with Iran was nearing its end, and G7 countries took steps to release strategic petroleum reserves to stabilise the market.

It is being argued in some quarters that fuel price increases will help reduce fuel consumption. There is no gainsaying that fuel consumption has to be curtailed during a global crisis, but that objective can be achieved with the help of QR-based fuel rationing. Huge increases in fuel prices are bound to push inflation up, with the prices of all essentials soaring. Private bus owners and trishaw operators have already demanded fare revisions. Even those who have no knowledge of Keynesian macroeconomic theory are familiar with the concept of sticky prices. Price increases are not followed by corrections in this country, and the Consumer Affairs Authority is a paper tiger.

The Opposition is of the view that the government has increased fuel prices to meet the cost of additional thermal power to be produced to overcome a generation shortfall caused by low-grade coal imports. This argument is tenable.

Meanwhile, fuel prices have an embedded debt-recovery levy that helps the CPC pass its legacy debt on to the public. This levy has enabled the IOC and Sinopec to make excessive profits, as they are not required to transfer the proceeds therefrom to the Treasury, according to a former petroleum minister. If so, the solution is to convert the debt-recovery levy into a special-purpose tax, which can be imposed on fuel marketed by IOC and Sinopec as well. It may also be possible to reduce the rate of the levy significantly by widening its application.

The unconscionable profits made from the sudden fuel price hikes are against the legal maxim that “no one should be enriched to the detriment of another”. The JVP-NPP government should be ashamed of fishing in troubled waters. It must stop exploiting the people who are struggling to make ends meet.