Fuel queues: Sri Lanka puts private suppliers on notice

Energy Minister Anura Karunathilake told Parliament that the current fuel queues have been caused largely by private fuel companies restricting supplies to the local market amid a sharp increase in international fuel prices.

Responding to a question in Parliament, Karunathilake said private suppliers have informed the Government that they are unable to sell fuel at prevailing domestic prices due to higher international prices.

As a result, the companies have reduced the volumes released to the market, placing an additional burden on the Ceylon Petroleum Corporation (CPC), he said.

The Minister said international diesel prices had risen significantly in recent months, citing the situation in the Middle East as a key factor affecting global markets.

He said the CPC had consequently increased the amount of fuel it releases to the market compared with February to compensate for reductions by private suppliers.

Karunathilake said the agreements governing private fuel companies do not allow the Government to direct them on the exact quantities of fuel that must be supplied to individual filling stations. However, the Government can require companies to maintain minimum fuel stocks in Sri Lanka.

The Energy Ministry Secretary has already issued instructions to companies that had failed to maintain the required minimum stocks and has also asked operators to take measures to prevent shortages in the market, the Minister said.

He added that the situation had been aggravated over the past few days by reduced supplies from private companies and normal variations in fuel distribution.

Another factor, according to Karunathilake, is that private companies generally do not supply fuel to dealers on credit, while the CPC provides a three-day credit facility. This has further increased demand for CPC fuel.

“We expect that, as the Ceylon Petroleum Corporation takes on this additional burden, the problem will ease to some extent by Wednesday or Thursday,” Karunathilake told Parliament.

His comments come after fuel queues were reported at several filling stations. CPC Chairman D.J. Rajakaruna had earlier said shortages reported at some locations were linked to private companies limiting supplies, rather than a broader CPC distribution or transportation problem.

The Ceylon Petroleum Private Tanker Owners Association has meanwhile urged motorists to avoid panic buying, maintaining that there is no nationwide shortage or disruption to fuel supplies. (Newswire)

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