500 Private Fuel Stations Threaten Closure as Diesel Supply Crisis Deepens

Around 500 filling stations operated by three private fuel distribution companies are reportedly prepared to suspend operations if the government fails to respond favourably to their request for a fuel price revision.

Minister of Ports, Civil Aviation and Energy Anura Karunathilaka said private fuel distributors have restricted diesel supplies, citing losses resulting from increased diesel costs.

The Minister said the government is considering several options to address the situation, including revising fuel prices, providing subsidies, or introducing alternative measures.

He noted that current fuel prices are significantly higher than they were before the outbreak of the war, and said the government must carefully consider whether consumers can afford any further price increases.

Fuel prices are due to be reviewed at the end of this month, at which point the government will consider whether to increase prices or provide subsidies to address the concerns raised by fuel distributors.

According to the Minister, private fuel companies have highlighted the losses they are incurring, particularly in relation to diesel, and have consequently restricted the quantity of diesel released to the market. He said there is currently no similar issue concerning petrol supplies.

Meanwhile, reports indicate that approximately 500 filling stations operated by Lanka IOC, Sinopec and RM Parks are prepared to close if their request for permission to increase fuel prices is not addressed.

The companies have sought an opportunity to discuss their concerns with the Ministry of Energy and have indicated that they may take further action if a satisfactory response is not received.

Petroleum Dealers’ Association Chairman Shelton Fernando said dealers representing the three private fuel companies gathered in Colombo yesterday (17) and collectively decided to take this position.

Minister Karunathilaka previously said the private fuel distribution companies had requested a fuel price revision to reflect their increased landing costs. However, no agreement has yet been reached to raise prices to the level requested by the companies.

Amid the ongoing disagreement, petroleum distributors say diesel supplies have been restricted for more than a week at around 275 Lanka IOC filling stations, 150 Sinopec stations and 100 RM Parks stations.

They further claim that diesel distribution by the three companies has declined by approximately 50%.

The Fuel Filling Station Owners’ Association has warned that the restrictions are causing severe inconvenience to consumers, particularly those dependent on diesel.

The Minister said the government is also considering a pricing mechanism that would establish upper and lower limits for fuel prices, allowing distributors to set prices within that range according to their operational costs.