An artificial fuel shortage due to foreign filling stations bargaining

The Sri Lanka Petroleum Private Tanker Owners' Association requests the public to refrain from panicking over the queues seen near fuel stations in some parts of the island today (05) and from unnecessarily hoarding fuel. The association's president, A.M.H., emphasizes that there is no fuel shortage or supply disruption in the country.

Adhikari points out that these queues have been created due to some filling station owners not placing their orders on time.

However, D.V. Shantha Silva, President of the Petroleum Distributors' Association, commenting on this situation, states that the main reason for this is that Lanka IOC, Sinopec, and R.M. Park, the companies distributing fuel in the country, have not ordered sufficient fuel. He mentions that these companies have significantly limited their weekly order quantities, claiming they incur significant losses from selling petrol and diesel, and as a result, a certain fuel shortage has been created at filling stations belonging to these three companies.

The relevant companies had previously informed filling station owners that they would limit deliveries because they were forced to sell fuel for less than the purchase price. The Petroleum Distributors' Association, which met and discussed this crisis on September 17, also warned authorities that a fuel shortage could occur in the country if an immediate solution was not provided. In response to these requests, recent price revisions were made to increase fuel prices and provide a government subsidy for a liter of diesel. However, the three companies maintain that they are still incurring losses even with this subsidy.

Although some fuel shortages are observed at filling stations belonging to these foreign companies, the Distributors' Association states that there is no possibility of a fuel shortage at filling stations belonging to the Ceylon Petroleum Corporation (CPC) if they place their orders on time. However, they believe that if the three companies do not resolve their issue of covering losses, the queue situation that the public is facing could continue.

Meanwhile, the Private Tanker Owners' Association has also commented on the commission paid for fuel transportation. Its president points out that the current commission calculation formula does not adequately consider transportation costs in the plantation sector and the Southern Province, and therefore, this method should be revised urgently. He further stated that the association has already submitted a request to the authorities regarding this, and work is currently underway to update the relevant calculation method, including the overlooked aspects.