Discussions are currently underway on whether to introduce a fuel subsidy or revise fuel prices, the Chairman of the Ceylon Petroleum Corporation (CPC), D. J. Rajakaruna stated.

Speaking during a media briefing on the recent fuel shortages reported at several filling stations across the country, Rajakaruna said the shortages were partly due to other fuel companies reducing the volume of fuel they released to the market.

He said representatives of all fuel companies were summoned for a meeting last week to discuss the situation.

During the meeting, the companies informed the government of the losses they are currently incurring on fuel sales, he said.

According to the figures presented, RM Parks (Pvt) Ltd is incurring a loss of Rs. 173 per litre of diesel and Rs. 38.75 per litre of petrol. Sinopec has reported losses of Rs. 192 per litre of diesel and Rs. 67 per litre of petrol.

Meanwhile, Lanka IOC has indicated that it is incurring losses of Rs. 136 per litre of diesel and Rs. 57 per litre of petrol.

Chairman Rajakaruna said that while the government has a national responsibility to ensure fuel availability, the other companies operate on a commercial basis and cannot continue selling fuel at a loss.

He further said that agreements signed with the companies contain provisions requiring the government to compensate them for losses incurred when fuel is sold at the stipulated prices.

Against this backdrop, discussions are underway on either allowing the companies to sell fuel at prices that would prevent losses or having the government intervene by providing a subsidy, according to CPC Chairman Rajakaruna.