Before the Budget: Gas Queues, Power Bills and a Tax-Cut Promise

On Thursday, 12 November, President Anura Kumara Dissanayake, who is also Finance Minister, will deliver the 2027 Budget speech in Parliament. The debate on the second reading runs from 13 to 20 November, and the committee stage continues to 14 December, according to the parliamentary timetable reported by Ada Derana.

The President has already set expectations high. Speaking in Colombo at the end of October, he pledged further tax cuts in the Budget and said they would not put the revenue target at risk, the Daily FT reported on 2 November. He also said no new taxes had been imposed since he took office.

In the same speech he made a striking admission. He said Sri Lanka had not yet achieved the economic and social transformation people voted for two years ago, describing recent results as economic progress rather than economic transformation. That is an honest description of the macro picture. But for most families, the question is simpler: is life getting cheaper? The week before the Budget gives a clear answer.

Queues for cooking gas, again

In late October and early November, a shortage of LP gas hit several areas, with people lining up at sales points. The Island, in an editorial, said ministers had dismissed claims of a shortage in Parliament while queues were visible to anyone who looked.

The government blames the private supplier. Cabinet spokesman Nalinda Jayatissa said LAUGFS Gas, which supplies about 15% of the market, failed to meet its agreed supply commitments, and that the Consumer Affairs Authority has started legal action against the company, The Morning reported on 4 November. He said state-owned Litro, which supplies about 85%, raised its monthly supply to 44,000 tonnes and distributed about 11,700 tonnes in four days.

LAUGFS says the problem is shipping disruption linked to the Middle East and regulatory limits on using its Hambantota terminal for the domestic market. It expects three shipments between 12 and 28 November and has asked the Treasury for temporary permission to use the terminal for local supply.

Whoever is more at fault, this is not the first gas shortage of 2026. In February, Litro told the public there was no need for panic buying after a supply constraint, and assured the country there would be no shortage in the future. In March, the President himself announced emergency gas shipments. A government that controls the dominant supplier and the regulator cannot treat repeated shortages as somebody else’s problem. As a Daily FT column argued in March, the real failure is the lack of contingency planning in the import tenders.

Electricity: one more increase on the table

On 4 November, the Public Utilities Commission of Sri Lanka (PUCSL) recommended a 1.46% electricity tariff increase for October to December 2026, Ada Derana reported. The National System Operator had asked for 2.88%, citing a projected Rs. 4.4 billion deficit. The regulator reduced the figure after revising estimates of extra costs linked to the use of substandard coal in the second quarter of 2026.

That last detail should anger every electricity user. Consumers are being asked to pay, in part, for the consequences of a coal procurement failure. The coal controversy was serious enough that Energy Minister Kumara Jayakody resigned in April 2026. In May, Opposition Leader Sajith Premadasa accused the government of making users pay for substandard coal imports, the Daily FT reported.

The proposed rise is small on its own. But it follows a tariff increase of about 11% on 31 March 2026, according to the Daily Mirror, as the government pursued cost-reflective pricing under the IMF programme. In opposition, the NPP promised to bring power bills down sharply. In government, it has repeatedly raised them.

VAT and the welfare squeeze

Value Added Tax remains at 18%, one of the most direct pressures on prices. In September, Professor Dunusinghe of the University of Colombo’s economics department told The Morning that the most important measure to ease the cost of living would be to reduce that VAT rate in the Budget. Earlier, the 2026 Budget lowered the VAT registration threshold, which SJB MP Harsha de Silva warned would push costs onto consumers through small businesses.

At the same time, support for the poorest has narrowed. The World Socialist Web Site, citing official figures, reported that the number of Aswesuma welfare beneficiaries fell from about 1.77 million in 2023 to about 1.25 million in 2026. The government says it is targeting support at genuine low-income earners, in line with IMF and World Bank advice. Critics say families just above the poverty line have been pushed out. The World Bank has estimated that around 22% of Sri Lankans live below the poverty line.

What to watch on 12 November

The Budget will be judged on whether its relief reaches ordinary households, not only on headline figures. Lanka Witness will look for four things: whether VAT on essentials is actually reduced; whether electricity users are protected from costs caused by procurement failures; whether there is a credible plan to end recurring gas shortages; and whether welfare support is widened for families who have fallen out of the Aswesuma scheme.

The President is right that stabilisation is not the same as transformation. The test now is whether the Budget delivers relief that people can feel at the gas counter and on the electricity bill, not only in the Central Bank’s numbers.