President says existing agreements restrict government action against private suppliers; CPC’s diesel market share rises to 77%
By The Pulseline News Desk
President Anura Kumara Dissanayake has announced plans to revise agreements signed with private fuel companies under previous administrations, claiming that contractual restrictions have limited the government’s ability to regulate prices and take action against suppliers withholding fuel from the market.
Addressing a National People’s Power (NPP) rally in Ibbagamuwa on Sunday (11), Dissanayake accused some private fuel companies of refusing to sell fuel at prevailing prices despite having stocks at their filling stations.
He said the government could not take legal action against the companies because of conditions in the agreements under which they were permitted to enter Sri Lanka’s fuel market. “These are agreements that have tied our hands. We will revise them,” he said.
According to the President, one private fuel company had requested a Rs. 132 per litre increase in diesel prices, while another had sought an increase of Rs. 116.
The government, however, had limited the diesel price increase at Ceylon Petroleum Corporation (CPC) filling stations to approximately Rs. 10 per litre while providing a subsidy of Rs. 70 per litre to cushion the impact on consumers.
Dissanayake said private suppliers had been informed that they could determine their own selling prices under the existing agreements, while CPC would continue supplying fuel at government-determined prices.
“We will continue selling at our price. There is no other solution under the existing agreements,” he said.
CPC expands market share
The President said the CPC’s share of the diesel market had increased from 58% to 77%, arguing that the state-owned supplier was in a position to meet additional demand if private companies failed to maintain supplies.
“If they cannot handle the remaining 23%, we will do it ourselves,” he said.
The remarks signal the government’s intention to strengthen the CPC’s role in the domestic fuel market while seeking greater flexibility to regulate private suppliers.
However, any revision of existing agreements could have implications for the contractual rights of private fuel companies and the regulatory framework governing their operations.
Dissanayake also claimed that the CPC had been transformed from a loss-making institution into a profitable entity under the current administration, pledging to strengthen its operations and protect consumers from excessive price increases amid rising global fuel costs.
Recruitment and institutional reform
The President said only 10 employees had been recruited to the CPC during the government’s two years in office.
Of these, four engineers were overseeing newly established projects, while the remaining six were involved in initiatives to supply fuel to aircraft at Bandaranaike International Airport in Katunayake.
He contrasted the limited recruitment with what he described as excessive appointments under previous administrations, arguing that the government was prioritising institutional efficiency and operational capacity.
The President’s announcement comes amid tensions between the government and private fuel suppliers over pricing, supply arrangements and the financial implications of maintaining fuel sales at different price levels.
While the government maintains that revising the agreements is necessary to protect consumers and ensure uninterrupted supplies, the proposed changes could test the balance between state intervention in fuel pricing and the contractual arrangements governing private sector participation in the market.
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