FINANCIAL CHRONICLE – The Sri Lankan government is exploring various strategies in response to the concerns raised by private fuel retailers regarding diesel pricing, as reported by Energy Minister Anura Karunathilaka. Retailers have indicated they are facing losses of up to Rs.160 per liter of diesel, leading to some fuel stations running out of stock.
In remarks made to the media on Monday, Minister Karunathilaka acknowledged the significant disparity between local fuel prices and the rising global market rates. He emphasized that the retailers’ complaints are being taken seriously and that the government is actively considering their requests as it prepares to implement future measures.
The Minister highlighted that the government has a range of options to address the fuel pricing situation. He noted that during previous price surges in April and May, the government had introduced a subsidy of Rs. 100 per liter for diesel and Rs. 20 for petrol. This approach could be revisited, or alternative pricing strategies could be devised. One potential solution could involve establishing a price range, allowing retailers to set their selling prices within those limits.
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Minister Karunathilaka reassured that the government is committed to balancing the needs of consumers with the challenges faced by private retailers in its decision-making process. He also confirmed that there is currently no shortage of fuel supplies in the country.
D J A S De S Rajakaruna, the chairman of the state-run Ceylon Petroleum Corporation (CPC), revealed that while the CPC is experiencing a loss of Rs. 60 per liter on diesel, this deficit is mitigated by profits from refining operations. He explained that the products being sold this month were ordered in the previous month, which contributes to the CPC’s lower loss compared to private retailers.
In light of recent geopolitical tensions in the Middle East that have driven crude oil prices above $100 per barrel, Sri Lanka’s fuel pricing mechanism has come under intense pressure. This has necessitated a series of rapid adjustments to align with the cost-reflective requirements of the International Monetary Fund (IMF) program. Earlier this year, following significant price increases of nearly 50% due to major conflicts, the government intervened with targeted subsidies aimed at supporting transportation and fisheries, as well as implementing Aswesuma social welfare initiatives for low-income households.
Although mid-year diplomatic efforts provided temporary relief, resulting in a reduction of domestic fuel prices by up to 6% in June, disruptions in vital shipping routes, such as the Bab el-Mandeb Strait, have reignited upward pressure on global fuel prices. While the government has managed to keep retail prices stable until early September 2026, private fuel distributors have begun to limit supply due to financial losses stemming from the prevailing pricing structure. (Colombo/September 14/2026)
