Colombo, Sep 14: Sri Lanka’s fuel distributors on Monday sought urgent intervention of the government to prevent private suppliers from reducing diesel stocks, warning that the move is disrupting supplies to fuel stations across the island nation.
The Fuel Distributors’ Association said three private operators, Indian Oil Corporation’s local subsidiary Lanka IOC (LIOC), China’s Sinopec and US-based RM Parks, have claimed substantial losses on diesel sales and are supplying reduced quantities against orders.
The companies are reportedly incurring losses of around LKR 170 per litre on diesel due to a sharp rise in international fuel and shipping costs as well as insurance and security costs amid uncertainty surrounding the Strait of Hormuz and risks to oil tankers.
“We seek the intervention of President Anura Kumara Dissanayake to settle this problem,” association representative Kumar Rajapaksa told reporters here.
“They only supply reduced quantities for orders. This has badly affected our capacity to run fuel distribution outlets,” he said.
Private operators currently account for a significant share of Sri Lanka’s fuel distribution network.
LIOC has around 20 per cent of the market, while Sinopec and RM Parks account for about 10 per cent and 5 per cent, respectively.
The development comes as Sri Lanka remains heavily dependent on diesel for public transport, agriculture, construction and industrial machinery, as well as private vehicles and backup power generators.
Any prolonged disruption in diesel supplies could therefore have wider implications for transport, businesses and economic activity.
State-owned Ceylon Petroleum Corporation (CPC) Chairman D J Rajakaruna said the state oil company was continuing to absorb losses on fuel sales as part of its “national duty”.
Energy Minister Anura Karunathilaka said the government may have to consider either providing a subsidy to offset the rising costs or increasing the retail price of diesel.
The Strait of Hormuz, through which roughly one-fifth of petroleum trade passed during peacetime, has remained largely blocked amid the US-Iran conflict, disrupting a key route for global oil supplies. (PTI)
