The International Monetary Fund (IMF) has reiterated that reinstating cost recovery for energy tariffs is an essential prerequisite for finalizing Sri Lanka’s Fifth and Sixth Reviews under the Extended Fund Facility (EFF).
In a press conference held on May 14, 2026, Julie Kozack, the Director of the Communications Department at the IMF, addressed inquiries regarding the alignment of the current government’s subsidies with the IMF’s guidelines. In response to a question from Financial Chronicle about a reported diesel subsidy of Rs. 100 per liter, Kozack highlighted that specific measures related to electricity and fuel pricing are necessary for securing the approval of the Executive Board.
The IMF outlined a “two-part” approach for the authorities to fulfill the program requirements. Kozack noted, “There are several prior actions that must be completed before we can present the program to our Executive Board, which include the restoration of cost recovery as well as adjustments in electricity and fuel pricing, all while safeguarding the vulnerable populations.”
She emphasized the importance of achieving full cost recovery while simultaneously ensuring that the most disadvantaged groups are protected from the adverse effects of these changes.
Financial Chronicle Biz English | Sri Lanka Business News.
