Private fuel operators limiting CPC’s pricing flexibility: President

President Anura Kumara Dissanayake has questioned the effectiveness of the previous government’s decision to open Sri Lanka’s fuel market to private suppliers, saying the presence of private operators has now limited the Ceylon Petroleum Corporation’s (CPC) ability to manage fuel prices with greater flexibility.

The President said that if the fuel market had remained entirely under state control, the CPC would have had greater room to manage price fluctuations while maintaining an efficient service.

“We could have managed price fluctuations and provided a better service. But now we do not have that ability because the private sector holds a share of the market,” the President said.

He recalled that private companies were initially brought into the fuel market on the premise that competition would improve the efficiency of the state-owned CPC.

However, President Dissanayake questioned whether the decision had delivered the intended results, pointing to the CPC’s growing market share.

According to the President, the CPC previously held around 58% of the diesel market, but its share increased to 74% last month.

He said private suppliers were unable to compete at the prevailing fuel prices and had consequently reduced their supplies significantly.

Despite selling fuel at lower prices, the President said the CPC had continued to increase its profits, demonstrating that the state-owned company had emerged as a successful competitor in the market.

Referring to its financial performance, President Dissanayake said the CPC recorded a profit of Rs. 36 billion last year, while the Ceylon Petroleum Storage Terminals Limited (CPSTL) recorded a Rs. 3.5 billion profit.

He added that the CPC had already recorded a profit of Rs. 28 billion so far this year.

The President said institutions that had previously operated heavily on bank borrowings were now maintaining significantly stronger financial positions. (Newswire)

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