Oil Shock Looms as Diplomats Warn of Russian Supply Risks
From Coal Fraud to Middle East War: A Perfect Storm Engulfs the Government
Coal Scandal, War Fallout, and Drought Converge to Pressure Government
Weerasinghe and Weeratunga
It has now been exactly 35 days since the United States launched its war against Iran. What began as a conflict involving only the United States, Israel, and Iran has since expanded, drawing in the wider Middle Eastern region, with repercussions now being felt across the globe.
Within the very first hour of the war, Opposition Leader Sajith Premadasa addressed Parliament with a special statement, warning of its immediate consequences. He cautioned that a fuel crisis could emerge in the near future and that there was a potential risk of the Strait of Hormuz being closed. He further stressed the urgent need for Sri Lanka to initiate discussions with countries such as Russia and India to ensure a continuous fuel supply.
However, Foreign Minister Vijitha Herath responded in a dismissive and somewhat mocking tone, insisting that there was no real risk of the Strait of Hormuz being closed. He added that even if such a scenario were to occur, Sri Lanka would still face no difficulty in obtaining oil from Singapore.
In the end, however, the very leaders who ridiculed Premadasa found themselves trapped in precisely the kind of energy crisis he had warned about, forcing them to swiftly initiate talks with Russia to secure fuel supplies. Unfortunately, this response has now come to resemble closing the stable door after the horse has already bolted.
Last week, in the “Inside Politics” column, we revealed that efforts to procure oil from Russia were being pursued not so much through formal government-to-government channels, but rather through personal connections. Many had assumed that Russia, being governed by a left-leaning administration, would naturally extend support to Sri Lanka’s self-proclaimed leftist government. However, perhaps due to the current administration’s apparent ideological confusion—straddling both left and right—Russia did not initially appear inclined to assist.
BRICS Summit
A key reason cited by many was the declining of the President Vladimir Putin’s earlier written invitation for Sri Lanka’s President to attend the BRICS Summit, shortly after he came to power. At the time, Russia reportedly viewed this as a slight against both the country and its leadership. As a result, despite both being labeled “left-leaning,” there was no close rapport between Russian authorities and Sri Lanka’s current leadership. In fact, Russia appeared to perceive Sri Lanka not as a leftist government, but as one leaning more toward the United States.
Compounding this situation is the current government’s lack of individuals with strong international networks and experience in global dealings. This has forced it to rely on various third parties to engage with the international community. As we pointed out last week, the government has been attempting to negotiate with Russia through individuals who had established Russian connections during previous administrations.
This revelation has now been fully confirmed. Two former Sri Lankan ambassadors to Russia—one appointed during the Rajapaksa era and the other during the 2015 “good governance” administration of President Maithripala Sirisena—have begun publicly commenting on the matter. Following the visit of Russia’s Deputy Foreign Minister to Sri Lanka for discussions on fuel supply, statements posted by these former ambassadors on their Facebook pages have effectively brought to light the underlying tensions and hidden dynamics behind these negotiations.
Who Brought Them In?
One of them is Dr. Saman Weerasinghe, who served as Sri Lanka’s Ambassador to Russia during the “good governance” administration. The other is Udayanga Weeratunga, who held the same post during the government of Mahinda Rajapaksa.
Many observers point out that, between the two, Udayanga possesses extensive connections in Russia—not only with official circles but also with various influential groups and networks. It is widely believed that getting things done in Russia often becomes easier through such powerful informal networks. Accordingly, many argue that Udayanga’s close ties with these circles enable him to navigate and secure outcomes from the Russian establishment with relative ease.
Special award
Dr. Saman Weerasinghe, however, is viewed differently. During his tenure in Russia, his work earned him significant recognition, and about six months ago he was even honored with a special award by Russian President Vladimir Putin. According to information available to us, it was through Saman’s channel that Russia’s Deputy Energy Minister and Deputy Foreign Minister visited Sri Lanka for discussions on fuel cooperation.
Saman himself appeared to highlight this development enthusiastically on his Facebook page, noting:
“It is indeed encouraging that formal discussions on energy cooperation between Russia and Sri Lanka have commenced.
Russia has consistently appreciated Sri Lanka’s friendly and constructive engagement in strengthening cooperation in the energy sector.
The Russian delegation was represented by Deputy Energy Minister R. Marshavin and the Russian Ambassador to Sri Lanka, H.E. L. Dzhagaryan.
The Sri Lankan delegation included Deputy Minister of Finance, Planning and Economic Development and Minister of Labour A.J. Fernando, Minister of Power and Energy K. Jayakody, Central Bank Governor N. Weerasinghe, Treasury Secretary H. Suriyapperuma, and CPC Chairman D.J. Rajakaruna.
I firmly believe these bilateral discussions in the energy sector will lead to meaningful outcomes and pave the way for a sustainable and beneficial solution for the country.”
Udayanga’s Response
However, while Saman portrayed the visit of the Russian delegation as a major breakthrough, Udayanga Weeratunga offered a sharply contrasting view.
In a Facebook post, he dismissed claims of government-to-government (G2G) fuel procurement from Russia as “a complete myth.”
Referring to the March 26 meeting between the Russian delegation, led by Deputy Energy Minister Roman Marshavin, and President Anura Kumara Dissanayake, Udayanga noted that although the Sri Lankan government has expressed readiness to purchase fuel, fertilizer, and coal through direct state-to-state agreements, serious doubts remain about the practicality of such arrangements.
Diplomatic advantage
Drawing on his decade-long experience as ambassador to Russia, he argued that Russia typically enters into G2G agreements only with countries that offer clear political or diplomatic advantages—nations that are either close allies or strategically aligned. While Sri Lanka is not hostile to Russia, it is also not part of its close circle of allies, instead being viewed as a neutral country.
He further pointed out that President Vladimir Putin’s written invitation to President Anura Kumara Dissanayake to attend the 2024 BRICS Summit was declined—an act that may have reduced Russia’s willingness to extend special political support.
Udayanga also recalled a past attempt during the presidency of Gotabaya Rajapaksa, when then Minister Susil Premajayantha tried to secure oil from Russia, but failed. He suggested that, both then and now, transactions presented as G2G deals may in reality involve intermediaries.
He further highlighted that, in the past, a letter sent by President Gotabaya Rajapaksa to President Putin had included the name of a non-diplomatic Sri Lankan, violating diplomatic protocol—an attempt that ultimately failed as it was effectively a private-sector deal disguised as a state-level agreement.
According to Udayanga, the current situation reflects a similar pattern. The inclusion of a non-diplomatic third party in high-level discussions—reportedly facilitated with the approval of the Russian Ambassador—suggests that this is not a genuine G2G transaction, but rather a deal involving specific groups.
He also noted the absence of a senior Foreign Ministry official—fluent in Russian and experienced in embassy work—from the discussions, arguing that this further indicates the deal had not been formally approved through official diplomatic channels.
Therefore…
The claim that Russian oil can be obtained through direct government-to-government (G2G) arrangements appears, in reality, to be little more than a propaganda narrative. Considering all these factors, it increasingly seems that—much like the coal tender under the current administration—this too could be another private-sector deal operating behind the façade of an official state transaction.
That said, I would still point out to the current government that there remains an opportunity to strengthen economic and political ties with Russia. To achieve this, the following steps could be considered:
- Securing Cabinet approval for a direct ruble–rupee transaction mechanism between the two countries
- Formal recognition of the ruble by the Central Bank of Sri Lanka
- Agreeing to a nuclear energy project in Sri Lanka based on Russian proposals
However, there is a strong view that such measures could be constrained by international geopolitical pressures—particularly from the United States.
Furthermore, the Russian side has indicated that if sanctions are reimposed, transactions would need to be conducted in ‘rubles’ or ‘yuan’ instead of the U.S. dollar.
The Reality
As pointed out by Central Bank Governor Nandalal Weerasinghe, Sri Lanka’s existing international obligations mean that large-scale commercial transactions can realistically be conducted only in U.S. dollars or major European currencies. He has reportedly conveyed—both to former President Gotabaya Rajapaksa and to President Anura Kumara Dissanayake—that adopting a ‘ruble’- or ‘yuan’-based system would be highly complex.
“After Consulting the Americans…”
Meanwhile, as revealed last week in the “inside politics” column, Russia had initially agreed to supply only two fuel shipments in response to the current crisis. It was further reported that any continued supply would require Sri Lanka to sign a long-term agreement—spanning five years—under Russian terms.
Practical Dilemma
However, the government now faces a serious practical dilemma. Prior to the outbreak of the Middle East conflict, the United States had imposed sanctions effectively restricting countries from purchasing Russian oil. With the escalation of the war and the resulting global fuel shortages, Donald Trump temporarily lifted these sanctions for a 30-day period as a stopgap measure.
Russia, taking advantage of this window, has reportedly informed Sri Lanka that any continued supply would require a five-year contractual commitment. But the key question remains: what happens once this 30-day grace period ends? If sanctions are reimposed, Sri Lanka could once again be cut off.
Against this backdrop, it is understood that the government recently sought clarification from the United States on how the situation might evolve. According to available information, Washington has not given a favorable response to the idea of a long-term arrangement. In fact, indications suggest that once the 30-day period expires, there is a strong likelihood that sanctions on Russian oil will be reinstated.
Hard line stance
Amid these developments, Russia has also taken a hardline stance, reportedly deciding to halt fuel exports from April 1. Many believe this move—associated with President Vladimir Putin—is intended as a lesson to countries that failed to engage with Russia when conditions were stable.
As a result, securing Russian oil in the future may become increasingly difficult, raising the risk of yet another fuel crisis. Moreover, what was presented as a state-to-state agreement now appears, in practice, to be evolving into a deal driven by various private intermediaries rather than a formal government-level arrangement.
Power Cuts Topple Power
As early warning signs of another fuel crisis begin to emerge once again, there are now growing indications of a serious electricity crisis as well. Last week, the Public Utilities Commission moved to increase electricity tariffs by nearly 25%.
From the outset, Opposition Leader Sajith Premadasa launched a strong campaign against the hike, highlighting the severe burden it would place on both the public and businesses. He even personally appeared before the Commission to present his views. His stance was driven by a clear political and social reality: while people may reluctantly endure increases in fuel or gas prices, electricity tariff hikes or power cuts are far less tolerable to the public.
History proves this repeatedly
The most recent was during the presidency of Gotabaya Rajapaksa in 2022. At the time, rising fuel and gas prices, combined with prolonged power cuts, became a key trigger in the collapse of his government.
Similarly, during the rule of Chandrika Kumaratunga in 1997, the country faced a major electricity crisis. The Minister of Power and Energy at the time, General Anuruddha Ratwatte—a relative of Chandrika and once celebrated as a war hero—eventually faced intense public anger due to power cuts. That crisis too marked the beginning of the government’s decline.
By the late 2000 period, the situation worsened further, with power cuts extending up to 10–12 hours a day. The crisis forced Chandrika to dissolve Parliament and call a general election. The opposition United National Party promised to restore uninterrupted electricity within 100 days. After coming to power, Energy Minister Karu Jayasuriya initially faced heavy criticism—earning the nickname “Darkness Jayasuriya.” However, the government eventually fulfilled its promise, restoring continuous electricity supply within the promised timeframe.
12-Hour Power Cuts Ahead?
The purpose of revisiting this history is not to suggest that the current government will necessarily face the same fate, but to underline the seriousness of the present situation.
Various analysts are now warning that Sri Lanka may be heading toward a major electricity crisis, with the possibility of imminent power cuts. One key reason cited is that all 13 coal shipments procured under the current administration have reportedly been of substandard quality, leading to a significant drop in daily power generation capacity.
As a result, greater reliance has been placed on fuel-based generation—reportedly requiring the burning of around 850,000 liters of diesel per day to meet electricity demand. Given the ongoing fuel shortages, this is widely seen as unsustainable, increasing the likelihood of large-scale power cuts at any moment.
The situation is further aggravated by severe drought conditions, which have reduced hydroelectric power generation significantly.
Alarming forcasts
Against this backdrop, opposition representatives held extensive discussions last week with energy sector experts. According to available information, these experts issued alarming forecasts. While the crisis may have been manageable at an earlier stage, they believe that critical opportunities have now been missed, leaving very limited options to address the situation.
Their assessment suggests that power cuts lasting up to 12 hours per day could soon become a reality. They also noted that the pathways to avoid such an outcome are now extremely limited.
Another serious concern raised by these experts relates to the recent tariff hike. The approximately 25% increase implemented by the Public Utilities Commission was based on conditions prevailing in December last year. Typically, tariff revisions are done quarterly, and this adjustment covered the October–December period—before any signs of a Middle East conflict or fuel and coal crises had emerged.
However, the current reality is vastly different. The Middle East conflict has dramatically altered the energy landscape. The next tariff revision discussions are expected around June, by which time pricing will reflect post-war conditions.
Accordingly, experts warn that another electricity price hike—potentially at levels unimaginable to the public—could be on the horizon. If that happens, it may feel less like an adjustment and more like an “electric shock” to consumers.
Backfiring Photo
With crises piling up one after another, many who look at events through an astrological lens now claim the government is going through a period of misfortune. Fuel shortages, gas shortages, electricity problems—and now even the risk of a fertilizer crisis—have combined to create a wave of issues affecting the entire population at once.
Perhaps because of this unfavorable climate, even actions intended to generate positive public perception seem to be backfiring. A clear example is the recent almsgiving event held at the residence of Minister K.D. Lalkantha.
Lalkantha has long been known as a blunt, outspoken figure—someone who speaks the truth regardless of consequences, sometimes even putting his own government in difficult positions. But this time, he became the center of national attention not because of something he said, but because of an event at his Colombo home.
Photo Simplicity
A photograph released to the media showed President Anura Kumara Dissanayake and Prime Minister Harini Amarasuriya visiting his house and sitting together on simple chairs, eating from paper plates like ordinary citizens.
The intention behind releasing this image was likely to highlight simplicity and relatability—something that has traditionally resonated well with the public. Similar images in the past—leaders opening their own car doors, jogging casually, mingling freely with citizens, or interacting warmly with children—have often gained widespread approval.
This trend is not new. During the era of Mahinda Rajapaksa, such images—whether climbing steps holding up a sarong, engaging in yoga, or even boxing—were highly popular. Likewise, during the presidency of Maithripala Sirisena, simple, relatable gestures like eating meals on banana leaves also attracted public attention.
However, history shows that as public dissatisfaction grows, the value of such imagery rapidly declines. The same images that once built popularity eventually lose their appeal—and can even provoke resentment. In the end, Mahinda Rajapaksa, despite winning the war, was rejected by the public amid corruption allegations, while Maithripala Sirisena—seen as reformist—was later dismissed as ineffective.
Lalkantha’s Case
A similar shift appears to be happening now. While such images may have resonated during the early period of President Anura Kumara Dissanayake’s leadership, the current climate has changed their impact.
Instead of focusing on the simplicity or unity displayed in the photograph, public attention quickly shifted to something else entirely—the apparent luxury of Lalkantha’s residence.
Until now, Lalkantha had been widely perceived as someone who rose from a modest, working-class background. He himself had previously described his personal struggles in detail—speaking about financial hardships, his wife continuing to work to support the family, and the difficulties of managing household expenses after dedicating decades to full-time political work.
But the house seen in the photograph did not match that narrative. What people saw instead was a modern, high-end residence—reportedly worth millions—with air-conditioning, upscale furnishings, and even a solar power system installed at significant cost.
As a result, what was meant to be a positive publicity move turned into a controversy. Rather than boosting the government’s image, the photo triggered criticism and suspicion. Reports even indicate that a social media activist lodged a complaint via the 1818 hotline regarding the matter.
The broader takeaway is becoming increasingly clear: the public is no longer easily persuaded by carefully crafted “simple lifestyle” imagery. Whether it is eating on banana leaves, casually jogging, or holding an umbrella in the rain—such visuals no longer carry the same weight.
In other words, the era of “media optics” alone shaping public opinion appears to be fading.
What Is Sajith Doing?
Amidst all these crises, what exactly is Opposition Leader Sajith Premadasa doing? Traditionally, the opposition is regarded as the alternative government, and the Opposition Leader is seen as the next potential leader ready to assume power.
Although various organized groups on social media have targeted Sajith with smear campaigns, he has never attempted—unlike some other politicians—to promote his personal image through a “media bubble.” Instead, over the past two weeks, Sajith has focused on his role as the alternative leader poised to take over the country’s governance, actively seeking solutions to the most pressing issue Sri Lanka currently faces: the energy crisis.
Emergy Crisis
In line with this, he convened a special discussion involving top-level academics and experts in the energy sector. During this meeting, he engaged in extensive deliberations on practical measures to manage the current crisis. He also held similar discussions with experts from other relevant sectors. Ultimately, Sajith instructed them to prepare a comprehensive report outlining actionable solutions, along with a clear roadmap to guide the country out of the crisis.
In addition, last week he organized another highly confidential discussion with a large group of scholars. Participants included prominent academics such as Ananda Jayawickrama (University of Peradeniya), Kennedy D. Gunawardana (University of Sri Jayewardenepura), K. Amirthalingam (University of Colombo), Priyanga Dunusinghe (University of Colombo), Nevis Morais (Open University of Sri Lanka), Prasanna Perera (University of Peradeniya), Harsha Aturupane, and Gunaratne, representing the university community. These experts emphasized that a well-balanced policy mix would be the most effective way to address the crisis.
Heated Discussion
At times, the discussions became heated due to differing academic viewpoints. However, Sajith remained composed, carefully listening to all perspectives and responding thoughtfully. He also made a conscious effort to seek clarification on complex issues in a calm and measured manner.
At the outset of the discussion, the Verité Research presented its views on the fuel pricing formula, noting that it must accurately reflect actual costs. They pointed out that price increases would therefore be inevitable, while also suggesting that alternative pricing mechanisms could be considered instead of strictly adhering to the existing formula.
Subsequently, Murtaza Jafferjee expressed the view that price increases should be allowed and that enabling free market forces to operate within the fuel market would help reduce inefficiencies. Addressing concerns raised during the discussion, he further emphasized that the government should intervene to provide targeted subsidies to vulnerable groups. Dhananath Fernando, Executive Director of Advocata Institute, also contributed actively, offering clarifications at various points.
By the end of the meeting, a common impression had emerged among participants: Sajith demonstrated a strong interest in the energy crisis, particularly in identifying practical solutions. He showed a clear willingness to engage with experts and gather insights on implementable policy options. Both university academics and representatives from other institutions expressed appreciation for his approach.
At the conclusion of the discussions, Sajith requested several experts present to urgently prepare a report outlining the potential consequences of the current economic crisis, along with both short-term and long-term strategies to address them.
Coal on the Streets
On the other hand, through his party’s political machinery, Opposition Leader Sajith Premadasa also launched a campaign last week to raise nationwide awareness about the alleged substandard coal scandal linked to the current government. By now, the opposition has taken steps—both inside and outside Parliament—to inform the public about the issue, and it is evident that widespread awareness has already been created.
Credit for bringing this matter to light should go first and foremost to Sajith, who initially presented details of the alleged coal irregularities in Parliament, as well as to MP Ajith P. Perera. In addition, S. M. Marikkar, who serves as Chairman of the Sectoral Oversight Committee on Energy, has also played a significant role in conveying accurate information about the issue to the public.
At the outset, the government rejected the opposition’s allegations, insisting that no such coal fraud had occurred. However, faced with mounting arguments, even a key government minister, Bimal Rathnayake, eventually acknowledged publicly that the quality of the coal had indeed been substandard. Several other government ministers have since admitted that the coal imported in recent times was of inferior quality. Nevertheless, they maintain that despite the poor quality, no fraud took place in the procurement process.
No-confidence motion
According to available information, the opposition is now preparing to make a series of major revelations regarding this substandard coal issue during the upcoming no-confidence motion debate against Energy Minister Kumara Jayakody—revelations that are expected to shake the country.
Against this backdrop, Sajith has instructed his party to take the issue to the grassroots level. As a result, the Samagi Jana Balawegaya (SJB) has begun organizing a series of village-level seminars and protest campaigns. These are being conducted under the theme “Lies and Theft—Anura Has Failed.” Sajith himself was seen actively participating in these events last week. Consequently, the no-confidence debate scheduled to begin on the 10th is already shaping up to be a highly engaging and closely watched political showdown for the public.
Sagale Left Isolated
Meanwhile, another notable development last week was a special meeting between senior members of the SJB and the United National Party (UNP), held at the Galle Face Hotel in Colombo. The occasion was a farewell gathering hosted by former MP Mayantha Dissanayake, who was preparing to return to Canada.
Mayantha, the brother of UNP Deputy Chairman Navin Dissanayake, had temporarily stepped away from politics and moved to Canada. He had recently returned to Sri Lanka to attend a memorial event for his father and hosted this dinner before departing again.
The gathering brought together several senior figures, including Sajith and other SJB members, as well as UNP representatives such as Ruwan Wijewardene, Akila Viraj Kariyawasam, Sagale Ratnayaka, and Talatha Atukorale.
Although the evening was generally warm and filled with lighthearted conversation, the most striking moment was the arrival of Sagale Ratnayaka. Despite being the UNP’s National Organizer, his presence appeared to subtly shift the atmosphere. Unlike usual occasions where he would engage actively with others, this time both SJB and even UNP seniors seemed to keep their distance, engaging minimally with him. Sensing this, Sagale reportedly chose to step aside early and begin his dinner ahead of others.
SJB- UNP
As has been reported on several occasions, there is strong support among both party supporters and many leaders for a possible SJB–UNP alliance. However, a small group of political “strategists” within both parties is believed to be working against such unity. These individuals have previously attempted to disrupt collaboration and are now reportedly promoting ideas such as forming a “common opposition” or fielding a “joint candidate.”
There are indications that one such figure within the UNP has already begun mobilizing resources—including social media campaigns—to push for a common candidate strategy. The alleged objective is to weaken Sajith’s position and once again deploy the “common candidate” tactic, thereby undermining a potential united victory for the SJB and UNP.
Looming conspiracy
Sources suggest that several SJB MPs are preparing to expose this alleged conspiracy in the coming days.
It is also worth noting that during the period when Ranil Wickremesinghe served as President, Sagale Ratnayaka functioned as his Chief of Staff and advisor. There are now claims that Sagale’s conduct during that time contributed to Ranil’s political decline—possibly explaining the cool reception he received at the dinner.
Despite these undercurrents, discussions at the event reportedly focused at length on how a future alliance between the two parties could be structured. Leaders deliberated on how they might contest jointly in upcoming elections, including the allocation of nominations across districts.
Meanwhile, during the past week, a close associate reportedly informed Sajith over the phone about efforts by some to promote a common candidate for the next presidential election—even with the backing of a senior SJB figure. The caller alleged that this individual, despite benefiting from Sajith’s support within the party, was speaking against him behind closed doors.
In response, Sajith remained unmoved, stating that there was no need for concern and that he would address all such matters at the appropriate time.
