Parliament’s Committee on Public Finance (CoPF) has approved a Rs. 71.7 billion supplementary allocation to finance the Government’s relief package aimed at mitigating the economic impact of the conflict in the Middle East, with the bulk of the funding directed towards maintaining fuel supplies and cushioning higher import costs.
The Committee, chaired by MP Dr. Harsha de Silva, approved Supplementary Estimate No. 03 of 2026 after reviewing the allocations and the proposed utilisation of the funds during a meeting held on 28 July, the Parliament Secretariat said yesterday.
Officials told the Committee that the largest allocation, Rs. 52.8 billion, had been earmarked for the petroleum sector to offset potential losses arising from higher fuel landing costs and ensure the uninterrupted supply of fuel, thereby preventing shortages.
The Committee was informed that the Rs. 71.7 billion package comprises two components. The first is Rs. 52.8 billion reallocated to settle payments relating to relief measures, including fuel subsidies provided during May and June 2026. The second is Rs. 18.9 billion reallocated to replenish the annual Budget contingency reserve after it was used to finance the April 2026 fuel subsidy for the Ceylon Petroleum Corporation (CPC) and other fuel suppliers, fertiliser subsidies for smallholder tea growers, and assistance to the fisheries sector.
Officials said the supplementary estimate would not increase either the Government’s expenditure ceiling or borrowing limit for 2026, noting that it represents a reallocation of previously approved budgetary provisions rather than new spending.
The Committee was also informed that the entire Rs. 71.7 billion allocation would be financed from the unutilised balance of the Rs. 500 billion Supplementary Estimate No. 01 of 2026, which had been approved to finance relief and recovery following Cyclone Ditwah. As at 30 June 2026, Rs. 243.9 billion of that allocation had been utilised.
According to the Committee, the fuel subsidy should be viewed as a temporary consumer relief measure rather than a subsidy to fuel companies.
Officials disclosed that fuel suppliers, including the CPC, received subsidies totalling approximately Rs. 20,507 million for April 2026 alone. Of that amount, Rs. 15,000 million was allocated to the CPC, Rs. 2,340 million to Lanka IOC PLC, Rs. 1,501 million to Sinopec, and Rs. 1,666 million to RM Parks.
The Committee also reviewed the broader allocation of the relief package, under which Rs. 15 billion has been allocated to the Ceylon Electricity Board, Rs. 8.2 billion for the Aswesuma welfare program, Rs. 3 billion to support agricultural activities during the Yala cultivation season, Rs. 2.2 billion for smallholder plantation farmers, and Rs. 1.2 billion for the fisheries sector.
The Road Development Authority also briefed the Committee on reconstruction work following Cyclone Ditwah.
Officials said the Governments of India and China had pledged assistance for rebuilding damaged bridges, while construction of the Galagedara and Rambukkana interchanges on the Central Expressway is expected to be completed by the end of 2028.
The Committee was also informed that tenders had been called for the electricity supply system for the expressway network and that work is expected to commence within the next three months.
The CoPF also discussed the potential impact of the El Niño weather phenomenon, with Dr. de Silva emphasising the need to strengthen the Disaster Management Statutory Fund to improve the country’s capacity to respond to future climate-related events.
In addition, the Committee held discussions on the determination of the Auditor General’s salary and broader public sector salary structures, deciding to continue deliberations before reaching a final decision.