Colombo consumer prices jump above CB’s 5% target as higher fuel prices reverberates through economy

The price levels of goods and services in Sri Lanka as a whole increased due to high food inflation

• Inflation in the Colombo district came in at 5.4% from a year ago, more than twice from the 2.2% in March
• Non-food inflation rose by 6.8% in April 2026 from a year ago
• Food prices rose by 2.8% annually from 0.7% 

The consumer inflation measured by the Colombo Consumer Price Index (CCPI) jumped in April as the higher fuel prices caused by the war in Iran fed quickly through the rest of the economy sending the prices of almost everything higher.

As a result the inflation in the Colombo district came in at 5.4 percent from a year ago, more than twice from the 2.2 percent in March.  

With the jump in prices in April, the inflation is now above the Central Bank’s medium term target of 5.0 percent which was earlier expected for the second half of this year.

But the war in Iran and the resulting price increases quickened the pace of prices than the earlier expected.

The prices measured monthly too rose sharply by 3.0 percent from a 0.3 percent increase in March.

The thrice raised fuel prices in March, on average by about 36 percent have sent shockwaves through the rest of the economy, lifting the prices of both food and non-food prices higher by a lot.  For instance, the non-food inflation rose by 6.8 percent in April 2026 from a year ago, up from 2.9 percent in March, led by the transport sub-category as the prices of petrol and diesel rose which in turn sending the fares of bus and three-wheelers higher. The housing, water, electricity and other fuels sub-category also rose significantly caused by the higher electricity, LP gas and kerosene prices. Almost all sub-categories under non-food inflation rose in April from the levels in March with the non-food index rising 3.6 percent, up from 0.8 percent in March.

Meanwhile, food prices rose by 2.8 percent annually from 0.7 percent in March while the prices measured monthly too jumped 1.7 percent from a negative 0.8 percent in March.

Except for a few food types, all else rose in prices with the prices of rice, green gram, dried fish, eggs, coconut oil, dhal and sugar prices rising the most. New Year festive demand too had an impact on the April prices.

The future prices could largely depend on the prices at the pump which is due to be determined at midnight today as the monthly fuel price revision is due today. The global oil prices rose to the highest levels yesterday since the Iran war began causing more strain on household budgets.

Sri Lanka is also planning to raise electricity prices again next week, the second such increase in about a month.