President says government will revise agreements with private fuel companies

President Anura Kumara Dissanayake said, on Sunday, the Government will revise agreements previously signed with private fuel companies, arguing that some of their provisions have limited the Ceylon Petroleum Corporation’s ability to determine prices flexibly and influence the market.

Addressing a National People’s Power rally in Ibbagamuwa, the President said the Government would not allow private fuel companies to operate solely on their own terms and would take steps to protect consumers when determining fuel prices.

He said the Ceylon Petroleum Corporation had been transformed from a loss-making institution into a profitable one and that the Government remained committed to maintaining fuel supplies without placing an additional burden on the public.

Dissanayake said only 10 people had been recruited to the CPC during the Government’s first two years in office. Four were engineers assigned to new projects, while the remaining six were recruited for a project supplying fuel to aircraft at Katunayake.

He contrasted this with previous practices, saying state institutions had been weakened by excessive recruitment.

The President said the CPC was currently able to sell fuel at lower prices than private companies.

He said one private company had requested a diesel price increase of Rs. 132 per litre, while another had sought an increase of Rs. 116. The Government had rejected those requests.

Instead, he said the CPC had increased the diesel price by only about Rs. 10 while absorbing around Rs. 70 per litre as a subsidy in order to reduce the burden on consumers.

Dissanayake said some private fuel companies were now facing shortages because they had indicated they would not sell fuel unless prices were increased.

He acknowledged that the Government’s ability to take legal action was constrained by agreements signed when the companies entered the market.

“There are provisions in the old agreements that restrict us. We will amend those agreements,” he said.

The President said the CPC’s share of the diesel market had increased from 58% to 77%.

“If they cannot handle the remaining 23%, we will do that too,” he said.

Dissanayake said the companies had already been informed that they could sell fuel at the prices they considered appropriate, while the CPC would continue selling at the prices determined by the state.

“Under the agreements that have been signed, there is no other answer,” he said.