Just as motorists hoped for a reduction in fuel costs, renewed price increases by private fuel suppliers have raised questions about the effectiveness of government relief measures and whether the benefits are reaching consumers.
The debate has intensified as private fuel operators continue to seek higher prices, citing difficulties in sustaining operations amid fluctuations in global fuel markets.
In response, the government introduced a fuel subsidy aimed at easing the financial pressure on suppliers. However, despite this assistance, private operators have increased the prices of Octane 95 petrol and Super Diesel, prompting criticism and renewed concerns over fuel affordability.
Energy Ministry Secretary G.M.R.D. Aponsu said private fuel companies had repeatedly informed the authorities that they were unable to absorb losses during periods of significant volatility in global fuel prices.
According to Aponsu, the government has provided private suppliers with a pricing formula that allows a degree of flexibility in adjusting prices.
“When fuel prices experience significant fluctuations, the three operators other than CPC tell us they cannot absorb the losses. We have therefore given them a pricing formula. Under that formula, they are allowed to increase prices within a prescribed limit. That is why they have increased the prices of Octane 95 petrol and Super Diesel. They have that freedom within the framework provided to them,” he said.
He also noted that fuel distributors are required to maintain minimum stock levels and continue supplying the market in accordance with existing regulations.
Aponsu further explained that the challenges within the fuel market stem from structural issues dating back to the introduction of private-sector participation in the industry.
“This is not an arrangement that came into effect yesterday. These agreements have been in operation for years. There was a problem from the very beginning. The market was not created on equal terms for all companies. It was not designed as a truly competitive marketplace. What existed under CPC was essentially distributed among the other companies, creating distortions from the outset,” he explained.
While policymakers continue to emphasise the need to establish a competitive fuel market, Aponsu said the infrastructure required to support genuine competition has yet to be fully developed.
As part of efforts to address these imbalances, he revealed that the government plans to establish 72 new fuel stations under the Ceylon Petroleum Corporation (CPC).
According to the Energy Ministry, expanding the CPC network is currently considered the government’s primary strategy to strengthen market competition and ensure a more stable fuel supply in the years ahead.
