CoPF approves Rs. 71.7 bn relief package amid ME conflict fallout

The Committee on Public Finance (CoPF) has approved a Rs. 71.7 billion relief package aimed at supporting communities affected by the economic fallout from the Middle East conflict, with the largest share allocated to stabilise the petroleum sector.

The approval was granted when the Committee, chaired by MP Harsha de Silva, reviewed Supplementary Estimate No. 03 of 2026 in Parliament. Officials informed the Committee that the allocation represented a reallocation of existing budgetary provisions and would not increase the Government’s expenditure ceiling or borrowing limit for 2026.

Of the total allocation, Rs. 52.8 billion has been set aside for the petroleum sector to offset potential losses caused by increased fuel landing costs and ensure uninterrupted fuel supplies. The Committee was informed that the allocation was intended to prevent possible shortages and was part of temporary consumer relief measures rather than a subsidy granted to fuel companies.

Officials said the Rs. 71.7 billion package consisted of two components. The first, amounting to Rs. 52.8 billion, would settle payments related to relief measures, including fuel subsidies provided in May and June 2026. The second component of Rs. 18.9 billion would replenish the annual budget contingency reserve, which had been used to finance April fuel subsidies, fertilizer assistance for smallholder tea growers, and support extended to the fisheries sector.

The Committee was told that the funds would be drawn from the unused balance of the Rs. 500 billion Supplementary Estimate No. 01 of 2026, which had been allocated for relief and recovery following Cyclone Ditwah. As of June 30, only Rs. 243.9 billion of that allocation had been utilised.

Officials disclosed that fuel suppliers had received subsidies totalling around Rs. 20.5 billion for April alone. Of this, Rs. 15 billion was allocated to the Ceylon Petroleum Corporation, Rs. 2.34 billion to Lanka IOC PLC, Rs. 1.5 billion to Sinopec and Rs. 1.66 billion to RM Parks.

The relief package also includes Rs. 15 billion for the Ceylon Electricity Board, Rs. 8.2 billion for the Aswesuma welfare programme, Rs. 3 billion for Yala cultivation activities, Rs. 2.2 billion for smallholder plantation farmers and Rs. 1.2 billion for the fisheries sector.

Meanwhile, the Road Development Authority briefed the Committee on reconstruction work following Cyclone Ditwah, stating that India and China had pledged assistance to rebuild damaged bridges. Officials also said construction of the Galagedara and Rambukkana interchanges of the Central Expressway was expected to be completed by the end of 2028.

The Committee also discussed preparedness for possible impacts of the El Niño phenomenon, with Harsha de Silva stressing the need to strengthen the Disaster Management Statutory Fund.

Discussions were also held on determining the Auditor General’s salary and broader public sector salary structures, with the Committee deciding to continue deliberations before reaching a final decision.