ECONOMYNEXT – Sri Lanka is considering all options in its fuel price review after private fuel retailers complained of a loss of up to Rs.160 per liter of diesel, Energy Minister Anura Karunathilaka said.
His comment comes amid a demand for diesel from private fuel retailers with some pumps have gone empty.
The Minister said some private retailers having said they incur a loss of Rs.160 per liter of diesel and they are unable to continue in the same manner.
“The global prices have risen sharply, but selling price in our country is far below the global prices,” Minister Karunathilaka told reporters on Monday when he was asked about the fuel price revisions.
“Some private retailers have said they cannot go forward like this. So, we consider their plea and expect to take steps accordingly in the future.
He said there are a few options the government considers in the review.
“It could be done in several ways, as you are aware, when prices rose sharply in April and May, the government provided a subsidy of Rs. 100 for diesel per liter and Rs. 20 for petrol. We can go in a similar way or we can also arrive at a decision on the prices,” he said.
“We can decide on an upper and lower limit and ask these private retailers to choose their own selling price between the two to determine the price.”
“We will consider all these and as a government we will consider both the consumers and the complaints from the private retailers when arriving at a decision.
The Minister also said there is no scarcity in fuel stocks.
D J A S De S Rajakaruna, the chairman of the state-owned Ceylon Petroleum Corporation (CPC) said the CPC was facing a loss of Rs. 60 per liter of diesel though that loss is offset by the profits from refinery.
“What we sell this month was ordered last month,” he said explaining why the CPC is not incurring losses as much as private retailers.
Following escalations in the Middle East that sent crude oil prices soaring past $100 per barrel, Sri Lanka’s fuel pricing model faced severe pressure, forcing a series of volatile domestic adjustments to maintain cost-reflective compliance under its International Monetary Fund (IMF) program.
Initially, the CPC enacted massive price hikes of nearly 50% following major conflict events in early 2026, prompting the government to step in with temporary, targeted subsidies for transport and fisheries alongside Aswesuma social welfare safety nets to cushion lower-income households.
While diplomatic negotiations mid-year offered temporary relief, allowing domestic fuel prices to be cut by up to 6% around June, renewed disruptions along key shipping corridors like the Bab el-Mandeb Strait have triggered fresh upward momentum in global benchmarks.
The government has held retail prices steady through early September 2026, but private fuel distributors have begun restricting supply over margin losses under the existing formula. (Colombo/September 14/2026)
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