CEYPETCO is going to open 75 new fuel stations

Amidst the heated dispute between private fuel companies and the government regarding fuel prices, fuel distribution activities in several parts of the island have been disrupted. Senior government officials confirm that the government has taken steps to immediately establish 75 new fuel stations under the Ceylon Petroleum Corporation (CPC) as a quick remedy to this situation and with the aim of breaking the private sector monopoly in certain areas.

As a result of this dispute, long queues were observed near some fuel stations last week, and several other stations were reported to have been closed. According to government officials, the main reason for these queues was the restricted issuance of petrol and diesel in areas where only private companies operate and there are no CPC-owned stations. Priority will be given to such provincial areas when opening new stations.

Minister of Energy, Ports, and Civil Aviation, Anura Karunathilaka, points out that despite private companies having sufficient fuel stocks, they are not releasing them to the market in adequate quantities. According to the agreements with the government, these companies are allowed to cover their costs using the fuel price formula. However, the Minister accuses them of not utilizing this opportunity and instead limiting supply by selling fuel at prices close to those announced by the Petroleum Corporation.

The problem is further exacerbated by the fact that people in areas where only private companies distribute fuel have no opportunity to obtain fuel from another supplier. The Minister emphasizes that this monopolistic situation held by private fuel stations must end, and CPC-owned stations should be allowed to operate concurrently.

In the face of this crisis, the government is now focusing on legal measures. The government has decided to seek the Attorney General's advice regarding the right of private fuel companies to determine prices, their contractual obligations, and the steps the government can take concerning fuel supply. The provisions of the agreements with fuel companies, as well as the powers vested in the Ministry under the Ceylon Petroleum Corporation Act, will be given special consideration.

Mr. D. J. Rajakaruna, Chairman of the Ceylon Petroleum Corporation, stated that the plan to open 75 new fuel stations has already been approved. He further mentioned that the Corporation is ready to take any necessary steps to prevent inconvenience to consumers and will take measures to further increase the number of stations if the need arises.

Currently, 1,440 fuel stations operate across Sri Lanka, with the majority, 887 stations, owned by the Petroleum Corporation. The Corporation also handles over 80 percent of the total diesel distribution. The remaining 553 stations are privately owned, distributed as 273 to Lanka IOC PLC, 150 to Sinopec Energy Lanka (Pvt) Ltd, and 130 to R.M. Parks (Pvt) Ltd.

Meanwhile, parallel to the supply crisis, the fuel transport sector has also put forward a new demand. Mr. A.M.H. Adhikari, President of the Lanka Petroleum Private Tanker Owners' Association, states that fuel transport charges should be increased by at least 20 percent. The association points out that this revision of transport charges is sought considering the increase in overall operational costs, including diesel, tire, and battery prices, as well as vehicle maintenance and employee wages. The future direction of this entire crisis will be determined by the Attorney General's advice on the conduct of private suppliers and the Petroleum Corporation's rapid program to expand its new network of fuel stations.