Sri Lanka government threatens legal action over private fuel supply restrictions

Sri Lanka is experiencing renewed fuel queues as private petroleum distributors scale back supplies due to financial losses. The government has indicated it may seek legal advice under the Ceylon Petroleum Corporation (CPC) Act if private companies continue to restrict distribution.

Energy Minister Anura Karunathilake informed Parliament that private operators, including Lanka IOC, Sinopec, and RM Parks, are facing mounting losses because domestic regulated prices do not reflect rising international market costs. Reports indicate significant supply reductions, with Lanka IOC’s auto-diesel releases reportedly falling by 45 percent and Sinopec’s diesel supply by approximately 66 percent.

As a result, the state-owned Ceylon Petroleum Corporation (CPC) has been forced to increase its market share to mitigate shortages, with its diesel supply increasing to cover the gap left by private competitors. While the government can mandate minimum stock levels, the Minister noted that current agreements do not grant the authority to direct specific distribution volumes to individual filling stations.

Fuel transporters have urged the public to avoid panic buying, stating that the issues are linked to order delays and pricing disputes rather than a total depletion of national stocks. The Ministry expects the situation to stabilize as the CPC continues to absorb the additional supply burden.