Fuel distributors have warned that shortages could emerge in the country if the ongoing issue concerning fuel pricing and supply is not resolved.
Lanka IOC, Sinopec and R.M. Parks who distribute fuel in Sri Lanka, in addition to the Ceylon Petroleum Corporation (CEYPETCO) had recently informed filling station operators that they would have to restrict fuel distribution as they were being compelled to sell fuel at prices below their purchasing cost.
The Petroleum Dealers’ Association met on September 17 to discuss the issue and warned that a fuel shortage could occur if the pricing issue was not resolved.
The government subsequently increased fuel prices during the latest fuel price revision and introduced a subsidy for each litre of diesel, taking into consideration the concerns raised by fuel distributors.
However, the Petroleum Dealers’ Association has attributed the current situation to the failure of fuel companies to place sufficient orders to meet demand.
Association Chairman D.V. Shantha Silva said motorists were seen waiting in queues at fuel stations in several parts of the country today due to a lack of fuel.
He said the association had been informed that the situation was not due to an overall shortage of fuel, but was linked to losses incurred by Lanka IOC, Sinopec and R.M. Parks on petrol and diesel sales.
According to Silva, although the government has introduced a subsidy, the three companies continue to consider the existing pricing structure to be loss-making.
He said this had resulted in the companies reducing the frequency of fuel orders, despite placing orders for supplies.
Silva further stated that fuel shortages were currently being observed at filling stations operated by the three companies, while such a situation was not expected at Ceylon Petroleum Corporation stations.
However, he stressed that fuel shortages at any filling station could be avoided if companies receive their ordered fuel supplies on time.
He warned that the situation could continue to affect fuel availability unless the three companies are able to resolve the issue.
