Iran war fallout: Rising prices dent Govt popularity

• Public fury is directed not just at administration, but also at President
• Calls grow to reintroduce QR code; opposition blames NPP’s ego for blocking it
• Opposition parties come together to form common platform to take on Govt, citing authoritarian tendencies
• SJB’s absence conspicuous, but general secretary says party will unite with the opposition at the right time
• Maj. Gen. Sallay’s detention stirs controversy; wife alleges psychological pressure amounting to torture for confession

By our ST Political Desk- 15-03-2026

  As the war in West Asia widened into its second week, the shocks came thick and fast for many countries, with Sri Lanka no exception. The first blow for the public came at midnight on Monday (9), with a substantial increase in fuel prices across the board. The very next day, state-owned Litro Gas, which had been putting off a price hike even as its private sector competitor Laugfs Gas had been steadily increasing prices, announced a significant hike of its own, with the price of the widely used 12.5kg domestic LPG gas cylinder going up by Rs. 300. The gas price hike added further misery to consumers owing to the prevailing shortage of both Litro and Laugfs gas.

Before the war began on February 28, the price of a barrel of crude oil was hovering between USD 60 and 70 a barrel. Given the speed at which the war had intensified and how the price of oil had climbed rapidly to over USD 100 a barrel by the middle of this week, a local price hike was inevitable.

Explaining the sudden, unscheduled price hike, Ceylon Petroleum Corporation (CPC) Chairman Janaka Rajakaruna noted that the price of diesel on the world market had increased by nearly 100% compared to prices on February 27, the day before the US and Israel launched their attacks on Iran. The world price of Octane 92 petrol had shot up by 75%, while the price of crude oil had increased by 37%. The CPC chairman also held the public partially responsible for forcing the CPC’s hand to increase prices early through panic buying as soon as the war started. The sudden surge in fuel consumption meant that fuel stocks which were meant to last till April had depleted, forcing the CPC to purchase fuel from new shipments at much higher prices. He appealed to the public to minimise fuel consumption and limit unnecessary travel.

Aside from making public appeals to conserve fuel, the National People’s Power (NPP) government has so far avoided taking stronger measures. This is in marked contrast to some of Sri Lanka’s neighbours in South Asia. Bangladesh, for example, started rationing fuel sales last week in an effort to halt panic buying and closed all universities to conserve energy. The Bangladesh government also deployed the military at major oil depots and police around fuel stations. In neighbouring Pakistan, the government this week directed schools to close for two weeks and for universities to shift classes online. Pakistan Prime Minister Shehbaz Sharif also announced that fuel allocations for government vehicles would be cut in half for two months, with exceptions for ambulances and public buses. He added that 50% of government staff would work from home to save fuel. In Myanmar, the ruling military junta introduced fuel rationing, introducing an ‘even-odd’ licensing scheme, with even-numbered plates only being allowed to drive on even dates and odd-numbered plates on odd dates. Electric vehicles and electric motorcycles, however, have been exempted. In Southeast Asia, meanwhile, the Philippines has moved to a four-day week as part of efforts to curb fuel consumption, while Vietnam has requested businesses to encourage work-from-home when possible to reduce the need to travel.

No such measures have been announced by the NPP government so far. As the war drags on, however, the government is facing growing calls to take tougher measures. In particular, it is under immense pressure to reintroduce the QR code-based fuel rationing system implemented during the economic crisis. The government has so far maintained that there is no immediate need to introduce the QR system.

Opposition party leaders held a news conference to announce the formation of a common platform to resist the government’s anti-democratic actions. The SJB was conspicuous by its absence

Cabinet Spokesman Nalinda Jayatissa told this week’s Cabinet media briefing that the QR system only served to eliminate long queues and panic buying. The available data shows that implementing the QR system did not reduce fuel consumption, he told journalists. Some in the opposition, though, insist that it is ego that is preventing the NPP from immediately introducing the QR system, as its introduction would serve as an admission that previous governments, which the NPP has been criticising as having not done anything useful for the country, had actually got something right. What’s worse, it would mean that the NPP too would have to rely on it.

The price hikes in fuel and cooking gas mean that the price of many other goods and services would go up too. Prices of rice packets, kottu, milk and plain tea as well as short eats have already gone up. School transport fees have also been increased by 5%. Private bus owners and three-wheeler operators are also demanding fare hikes in line with increased fuel prices, with bus owners warning they may resort to trade union action if their demands are not met.

The bottom line in all this is that the cost of living has substantially gone up for ordinary Sri Lankans since the start of the war.

Public anger owing to the rising prices and shortages in items such as cooking gas has been directed not just against the government but increasingly at President Anura Kumara Dissanayake himself. The latter is a more recent trend and one that should worry both the NPP and the President. While the NPP government has copped plenty of public criticism over the past year, President Dissanayake’s popularity has largely been unaffected. There have been numerous occasions in the government’s tenure so far where the President has had to come before Parliament and use his considerable oratory skills and personal charisma to effect damage control measures whenever the government has found itself in difficult situations. The trend has become so pronounced that it has developed into a running joke among opposition MPs as to which crisis would compel the government to put forward the President next to restore some measure of public faith. Yet, the West Asian crisis, coming just three months after the country had been battered by Cyclone Ditwah, is now testing the President’s popularity as well.

President Dissanayake hinted at the personal criticism being directed his way when he addressed the Chamber of Lankan Entrepreneurs (COYLE) 2026 Annual General Meeting on Tuesday (10). In a wide-ranging speech, he spoke of the challenges posed to Sri Lanka by the West Asian crisis. He noted that the war is disrupting the supply of goods and services.

Lawyers and supporters of Maj. Gen. Suresh Sallay hold a news conference to highlight what they describe as inhuman conditions under which the former SIS chief is being detained by the CID. Pix Indika Handuwala

“This is an era in which technology and science have given unprecedented power to warfare. As a result, it is impossible to predict the impact of such advanced military operations over the long term. Short-term forecasts are possible, but if the conflict continues beyond that period, no one can reliably predict the outcomes. Therefore, assurance can be provided that energy supply will be maintained over the next two months even though prices may fluctuate. I am neither an owner of an oil well nor a representative of any oil company. These actions are not undertaken for personal profit. However, as a government, there is a responsibility to ensure an uninterrupted supply of energy,” President Dissanayake emphasised.

The President has now publicly assured that the energy supply will be maintained over the next two months, whatever challenges may come. The Iran war, however, continues to be unpredictable, mainly due to the rapidly changing mindset of US President Donald Trump. The famously maverick US President continues to give widely contrasting signals about when the US might bring about an end to the war.

How all these new developments could affect world oil prices, if there will be further supply chain disruptions, and whether the war will become even more intense than it already is, are all unknowns at this point. Amidst this uncertainty, there was relief for the government on the foreign affairs side this week after the successful repatriation of the 84 bodies of Iranian sailors who died following the US attack on their ship IRIS Dena on March 4. The 32 remaining sailors who survived the attack remain in Sri Lanka and are being housed at the Sri Lanka Air Force Base at Koggala.

The repatriation process was a delicate one with a lengthy legal procedure to be followed before the remains were sent from here to Cochin in the Indian state of Kerala. Autopsies were carried out on all bodies, and the reports were submitted in the Galle Magistrate’s Court before Chief Magistrate Sameera Dodangoda directed that the bodies be handed over to Iran embassy officials. The autopsy reports revealed that the sailors had died from fractures caused by an explosion, internal injuries and drowning. The post-mortem examinations of bodies were conducted by Prof. U.C.P. Perera and consultant forensic specialist doctors Ajith Ratnaweera, Janaki Warusahennadi, Rohan Ruwanpura and a team of forensic medical officers.

After the legal procedures were concluded, the remains were transferred under tight security from Galle to the Mahinda Rajapaksa International Airport at Mattala and from there loaded onto a special chartered Airbus aircraft headed for Cochin on Friday evening, thus bringing to a close a trying time for the authorities here who have had to engage in an unprecedented balancing act, maintaining their neutral stance on the ongoing conflict.

Policy reversal: Permission for FAO vessel

However, there was a policy reversal by the government this week when a decision was made to invite the United Nations-flagged vessel R/V Dr Fridtjof Nansen under the Food and Agriculture Organisation (FAO) to deploy in Colombo this week, less than a year after the government refused entry for the same vessel. A senior Ministry of Foreign Affairs (MFA) source said the research vessel was allowed to deploy with ‘special approval’ given it is an FAO ship, but such ad hoc changes in policy illustrate that on many matters, decisions made at the highest level are made on a subjective basis and not objectively thought out.

The visit by R/V Dr Fridtjof Nansen was scheduled to take place from July 15 to August 20 last year, a visit arranged based on a request by the Fisheries Ministry, the lead ministry, in 2023. However, when the request was made to deploy the vessel from July to August last year, the Fisheries Ministry had taken back the clearance given to it after receiving communication from the MFA.

The MFA has maintained that permission for foreign research vessels will not be given until the government finalises a new Standard Operating Procedure (SOP), for the purpose of which a committee headed by Foreign Minister Vijitha Herath has been set up. The inter-ministerial committee was appointed in December 2024, but it has yet to finalise a new SOP. It is in the midst of the government’s indecision over allowing research vessels that the MFA announced this week that the government has invited the R/V Dr Fridtjof Nansen to conduct a marine scientific survey in Sri Lanka’s Exclusive Economic Zone (EEZ) in collaboration with the Ministry of Fisheries, Aquatic and Ocean Resources and the National Aquatic Resources Research and Development Agency (NARA).

In a media release, the MFA said that Sri Lanka previously hosted the R/V Dr Fridtjof Nansen in 2018, when the vessel conducted a comprehensive survey of Sri Lanka’s continental shelf and upper slope in collaboration with national institutions, while earlier Nansen surveys were also carried out in Sri Lankan waters in 1978–1980, reflecting a long-standing scientific partnership under the Nansen programme. However, there was no mention of the same vessel being refused entry last year.

R/V Dr Fridtjof Nansen docked in Sultan Qaboos Harbour, Muscat, Oman, on February 26, but due to the ongoing conflict in the area, a request had gone from SLanka to deploy here.The research will begin on April 1.

The issue of foreign research vessels docking in Colombo has been a matter of contention for a while now. In December 2023, the then government declared a one-year moratorium on permitting foreign research vessels in its territorial waters amidst pressure from India and the United States over Chinese vessels coming for research purposes. The moratorium ended in December 2024, and the present government announced it would not extend the moratorium but instead chose to appoint a committee to draft new SOPs for such vessels. But this week, the government did a U-turn, allowing the UN vessel without any new SOP in place; hence, it’s possible that other research vessels may also be on the way.

Opposition in fresh unity bid

As the crisis in West Asia escalated, leaders and representatives of political parties making up what they claim to be the ‘Joint Opposition’ came together in Colombo on Wednesday (11) to hold a news conference under the theme, ‘Let us protect democracy, rule of law and the sovereignty of the people.’ Representatives of most major opposition political parties were in attendance. They included the United National Party (UNP), the Sri Lanka Podujana Peramuna (SLPP), the Sri Lanka Freedom Party (SLFP) and its coalition partners under the People’s Alliance (PA) and the Pivithuru Hela Urumaya (PHU). The event also drew a large number of former ministers and MPs, including Prof. G.L. Peiris, Thalatha Athukorala, Wajira Abeywardena, Mahinda Yapa Abeywardena, Nimal Siripala De Silva, Anura Priyadarshana Yapa, Mahinda Amaraweera, Duminda Dissanayake, Patali Champika Ranawaka, Udaya Gammanpila, Sanjeewa Edirimanna and Asanka Navarathne.

It was the second time that so many opposition politicians from diverse political parties had come together to address a joint media conference; the first was in the aftermath of the arrest of former President and UNP leader Ranil Wickremesinghe. Mr Wickremesinghe was not in attendance at Wednesday’s event, though he did send a congratulatory message, which was read out by UNP General Secretary Thalatha Athukorale.

“At a time when all the principles mentioned in this theme are facing significant threats and challenges, such a collective gathering is particularly commendable. I have always contributed to these efforts and remain ready to provide guidance whenever necessary in the future. The United National Party also remains a constant partner in this process,” Mr Wickremesinghe stated in his message. He stressed that parties must “absolutely be united” to successfully meet the challenges before them.

The absence of the main opposition Samagi Jana Balawegaya (SJB) at the joint media conference, however, is evidence that the ‘unity’ among opposition parties which Mr Wickremesinghe advocated in his message is yet to be realised. SJB MPs Mano Ganesan and V. Radakrishnan, who are part of the Tamil Progressive Alliance (TPA), were present at the news conference, as was SJB MP Dayasiri Jayasekara, though all three were there in a personal capacity and did not officially represent the SJB. The SJB has been reluctant to fully commit to aligning itself with the joint opposition. The party’s absence at Wednesday’s presser does not mean that it has decided to walk away from efforts being made to unite opposition parties, said SJB General Secretary Ranjith Maddumabandara. He recalled that he himself attended and addressed the joint press conference held by opposition parties last August to condemn Mr Wickremesinghe’s arrest. As the main opposition party, the SJB is continuing to work with other major opposition parties, said the SJB General Secretary, adding that the party will unite with them “at the right time”. Whether that ‘right time’ will come is anyone’s guess, say critics.

Given the vast political and ideological differences between parties in the joint opposition, those who have worked to unite them stress that their objective is not to form one major political alliance targeting elections but to find common ground when opposing ‘anti-democratic activities’ of the government. “We have been working for some time now to bring all the opposition political parties under one umbrella. That does not mean these parties will cease their own political activities and come into a coalition,” said People’s Alliance (PA) chairman and former minister Anura Priyadarshana Yapa. He pointed out that opposition parties first came together after the arrest of Mr Wickremesinghe last year, and the idea then came about to create an umbrella of opposition parties that will come forward during times when there are ‘national issues’.

The joint opposition united on this occasion to raise concerns over the government’s moves towards cementing one-party rule, attempts to infringe on the independence of the judiciary and its handling of the economy during a deeply volatile situation, Mr Yapa said.

In the aftermath of the unity that was forged when opposition parties came together to oppose Mr Wickremesinghe’s arrest, several of those parties formed the ‘Mahajana Handa’ (Voice of the People) alliance. While the SJB sent representatives to the Mahajana Handa, it has so far avoided sending any representatives when the group holds public events, Mr Yapa pointed out. He did not blame the SJB for this given that the move to stay away from such public events would have been a party decision. “We are not criticising the SJB’s decision, but other parties are joining, and we believe that if the SJB too could join, it would be better. Whether they will realise this today or tomorrow or the day after, I don’t know, but others are working together.”

While the SJB has been reluctant to take the same stage as other parties publicly as part of the joint opposition, talks it has been holding with the UNP on possible reunification have also not led to a breakthrough. Mr Premadasa had personally taken over leading those talks for the SJB months ago, yet nothing has moved beyond that, leading to frustration among unity advocates in both parties. Here too, General Secretary Maddumabandara claimed reunification talks are continuing and insisted the SJB will reach an agreement with the UNP “very soon” but offered no details.

The joint opposition, meanwhile, has its own plans. The parties are briefing international organisations on the anti-democratic activities taking place in the country, as well as attempts by the government to interfere in judicial independence, UNP Chairman Wajira Abeywardena says.

The SJB, meanwhile, will begin a series of seminars next week to highlight the government’s poor economic management, the mismanagement of the coal tender and how it is making undue profits by selling old fuel stocks at higher prices, disregarding the fuel formula, SJB General Secretary Ranjith Maddumabandara said.

“The government is doing exactly the opposite of what the president said when in opposition,” he said. The SJB general secretary noted estimates indicate that there had been a loss of over Rs 8 billion alone from coal shipments delivered so far. “The government is trying to make up this loss through the fuel price hike,” he charged. He added that the government is paying the price for not taking the correct steps on time.

Sallay arrest: Repercussions

Meanwhile, the arrest and detention of the former State Intelligence Service (SIS) chief, Major General (Retired) Suresh Sallay, over his alleged links to the Easter Sunday terrorist attacks have continued to draw criticism, with critics calling it a witch-hunt.

On Wednesday, the Criminal Investigation Department (CID) told the Fort Magistrate’s Court there were three main allegations in connection with investigations related to the 2019 Easter Sunday attacks. These include allegations that Maj. Gen. Sallay misled investigations into the Vavunathivu police killings and the Sainthamaruthu explosion; an intelligence informant was allegedly used to show the Katuwapitiya church to terrorists prior to the day of the attacks; and the former SIS chief had attempted to influence investigators to conduct a third DNA test related to Sara Jasmine, the widow of Mohammed Hashtun, who carried out a suicide bomb attack on St Sebastian’s Church in Katuwapitiya, despite two earlier tests failing to confirm her death following the Sainthamaruthu explosion.

At a news conference on Thursday, a group of supporters of Maj. Gen. Sallay, including one of his lawyers, refuted these allegations and accused the CID of fabricating evidence.

Questions were also raised about the detention conditions of Maj. Gen. Sally to please the pro-Eelam diaspora. Allegations that the former SIS chief is being held in inhumane conditions have also been made by his wife S.B.M.S.B. Sallay, who had written to Police Chief Priyantha Weerasooriya on March 7 over the ‘Cruel, Inhuman and Degrading Treatment’ to which her husband is being subjected while under detention. She also alleges procedural irregularities in the arrests and detention of her husband.

Here are extracts of the letter sent to the IGP, which has been seen by the Sunday Times:

“On the 25th of February 2026, my husband was arrested whilst travelling to his office and has been kept under a detention order from the 28th of February 2026 to date at the Criminal Investigation Department. On the 26th of February 2026, I wrote to the Director of the CID, retired SSP Mr Shani Abeysekera, requesting access for family visits, permission to provide food from home, and access for legal counsel to meet with my husband.

“In response to my request, the Director CID, by his letter dated 27th February 2026, permitted family visits only on Saturdays between 9.00 a.m. and 1.00 p.m., subject to the provision of police clearance reports for the relevant family member. Lawyer consultations were allowed only on Wednesdays between 9.00 a.m. and 3.00 p.m., provided that a written request was submitted before 10.00 a.m. on the preceding day. However, the request to provide food from home was refused in the said reply.

“I subsequently wrote again to the Director CID on 28th February 2026, outlining the considerable difficulties encountered in obtaining the required police clearance for the relevant family member, as well as the severe mental pressure and hardship caused to the family due to the distressing conditions imposed for visitations.

“In this regard, I respectfully wish to inform you that although we made the necessary representations to the Kohuwela Police in order to obtain a Police Clearance Certificate for our son to visit his father, the said certificate has not been issued to date.

“However, CI Gunasekera, who introduced himself as the Chief Investigating Officer in the case against my husband and whom I contacted on 28th February, informed me that our son would nevertheless be allowed to visit his father on the same day. Our son was permitted to speak to his father for approximately half an hour, under the supervision of three CID officers.

“I also wish to place on record that on 04th March 2026, the Attorney-at-Law scheduled to visit my husband was contacted by CI Gunasekara, the Investigating Officer, and requested to attend the CID premises at 2.00 p.m. for consultation. The Attorney-at-Law complied with this request and was thereafter taken to the Special Unit, which is located separately from the main CID building. Regrettably, the consultation was conducted in a manner wholly inconsistent with the confidentiality and privilege inherent in an Attorney–Client relationship.

“Today, (March 7), my son visited the CID at approximately 10.40 a.m. in order to see his father. He was requested by officers at the gate to fill out a form seeking approval for the visit. After waiting for approximately three hours, he was informed that “higher authorities” had not granted approval for him to visit his father.

“However, my husband’s brother, retired Major Tuan Fazeer Sallay, a disabled war veteran of the Commando Regiment, was granted permission to visit him. I have been informed by my brother-in-law that my husband complained to him of being subjected to cruel, inhuman, and degrading treatment by the administrative arm of the CID.

“My husband has stated that his cell was changed after the lawyer consultation on the 4th of March and that he has been placed in a rat-infested cell which is extremely hot and poorly ventilated, making it almost impossible to breathe. He has also developed severe migraine headaches as a result of these conditions and has not been provided with medication. He has further complained that he is being subjected to psychological pressure to give a confession, amounting to mental torture. As a result of these deeply distressing circumstances, I and our children are undergoing severe psychological trauma and emotional distress, caused by the uncertainty surrounding his detention, the restrictions on family contact, and the alarming reports regarding the conditions in which he is being held.”

Mrs Sallay has requested the IGP to record her complaint, the statement of Mr Tuan Fazeer Sallay, and a statement of her husband through an independent police unit which has no attachment to the supervisory powers of the present Director CID to immediately change the place of her husband’s detention; transfer the present investigation against her husband from the CID to another police division over which the present Director CID has no control whatsoever; take immediate steps to produce her husband before a judicial medical officer and a psychiatrist for psychological evaluation; and institute criminal proceedings against those responsible for the cruel, inhuman, and degrading treatment of her husband.