Private fuel distributors seek urgent return of cost-reflective pricing

Private fuel distributors operating in the island have urged the government to urgently re-implement a cost-reflective pricing mechanism, following severe cash flow strains and mounting losses in retail fuel distribution.

It is understood that private market operators have submitted joint representations to the Ministry of Energy, addressing both the Subject Minister and the Ministry Secretary.

Sources indicate that private suppliers are currently sustaining losses estimated at around 170 rupees per litre of diesel, driven by rising global market rates and high maritime freight costs.

It is learnt that government financial relief, previously provided at 100 rupees per litre for diesel and 20 rupees per litre for petrol during the second quarter, was discontinued in July.

The cessation of these subsidies, combined with strict vessel draft constraints at local discharge berths that limit eligible import tankers, has severely restricted the liquidity required to finance upcoming shipments.

Private operators maintain that without a standardised cost-reflective pricing structure applied equally across all four market distributors, maintaining uninterrupted fuel supply across retail networks will become increasingly unviable.