The “twin shocks” of rising food and oil prices in 2007 and 2008 caused negative impacts on developing countries in terms of poverty reduction and economic growth. Many analysts believe that a similar crisis is looming on the horizon after the world food price index hit the 2008 peak in December last year and the oil price in the UK reached the price level it had two years ago in January 2011. However, there is a limited body of empirical evidence available from developing countries on the impact of high oil prices on growth in general and household poverty in particular. In this study, Sri Lanka is used as a case study and a computable general equilibrium (CGE) approach is adopted as an analytical framework to explore the growth and poverty impacts of high oil prices. The preliminary results suggest that urban low income households are the group most adversely affected by high global oil prices, followed by low income rural households. In contrast, estate low income households are the least affected out of all low income households. The energy intensive manufacturing sector and services sector are affected most compared to the agricultural sector.