The Ceylon Petroleum Corporation has been authorised to open 75 new fuel stations, and Energy Minister Anura Karunathilake says private suppliers are free to set their own prices to cover their costs — but will face legal action if they restrict supply to force a price rise.

The two statements, published on Sunday, are the government’s clearest response yet to the supply restrictions that returned fuel queues to Sri Lanka at the start of the month.

CPC Chairman D.J. Rajakaruna told the Sunday Times that authorisation had been granted for the new stations, to be sited particularly in areas with no CPC-run sheds, and that the number would rise further if needed.

“In areas where only the private companies operate, there are long queues, as these companies have limited the issuing of both petrol and diesel. We will take any measure to stop the people from being inconvenienced,” he said.

Karunathilake, who holds the Energy, Ports and Civil Aviation portfolio, put the rationale in blunter terms: the private operators’ monopoly in the outstations was inconveniencing the public, and it had to be broken by letting CPC stations operate alongside them.

The monopoly is geographic, not national

The Sunday Times publishes the market structure behind that claim. Of 1,440 filling stations island-wide, Ceypetco operates 887 — with Lanka IOC on 273, Sinopec Energy Lanka on 150 and RM Park on 130. Those figures sum to exactly 1,440.

That makes the state corporation the operator of roughly 62% of the country’s stations, while handling over 80% of diesel distribution and supply. The minister is therefore not arguing that private firms dominate the national market. His complaint is about particular towns where they are the only operator — which is why the remedy is new stations in those places rather than a national measure.

”They may raise prices — they have chosen not to”

The minister’s position on pricing, reported by the Daily Mirror, is that private suppliers have the option of pricing fuel on their costs if they choose to. He said some private stations had been limiting distribution and inconveniencing consumers, and warned the government would take legal action if supplies were restricted to pressure the authorities into approving increases.

The government would not yield to “unjustified pressure from multinational companies or fuel distributors,” he said, adding that while it aimed to support investors, protecting consumers and keeping supply uninterrupted remained the priority.

The Sunday Times carries the same argument with the mechanism attached: the companies are permitted under their agreements to raise prices under the fuel pricing formula, but have not used that option, instead holding their prices close to the CPC’s while limiting what they issue.

“They have adequate stocks but are not issuing at the optimum level, which has led to the queues,” the minister said.

Two strands of the government’s position sit awkwardly together. Suppliers are told they may price on cost, yet also told the government will not allow them to “arbitrarily increase prices under pressure.” No filing draws the line between a permitted cost-based increase and an impermissible one.

The Attorney General’s advice has now been sought

On 7 October the minister told Parliament the government would seek legal advice if restrictions continued. The Sunday Times reports that the ministry has now sought the Attorney General’s advice — closing a question this newsroom left open on 6 October.

One ambiguity carries over. The Sunday Times describes the advice as sought within the framework of the agreements and the powers vested in the ministry under the Ceylon Petroleum Corporation Act, while its own second report on the same page names the Petroleum Act. Our earlier coverage flagged the Daily Mirror and NewsFirst naming those same two different statutes. That one newspaper now names both in a single edition suggests both are in play, rather than one outlet having erred.

A second dispute, and a different account of the cause

A related Sunday Times report sets out a separate quarrel over what it costs to move the fuel. The Ceylon Petroleum Private Tanker Owners’ Association wants transport charges revised to reflect diesel, tyres, batteries, maintenance and wages; its chairman A.M.H. Adhikari puts the necessary increase at about 20%.

A final decision was expected by Monday. Rajakaruna said an agreement had been reached with the bowser owners to study the formula further, with the decision held up because a University of Moratuwa expert committee reviewing it had yet to report.

That report also offers a different cause for the queues than the one previously on record. It states that the dispute over transport charges “triggered off fuel shortages at filling stations earlier this week” — where the reporting of 6–7 October attributed them to the three distributors cutting releases over losses. The two are not mutually exclusive, since bowsers are how fuel physically reaches the pumps, but no filing reconciles them.

Rajakaruna also gave a blunter figure for the restriction than the per-company percentages published last week, saying the private operators are “releasing only 50% of their fuel,” and insisted the situation is not a shortage:

“We arrange for fuel shipments to arrive earlier than scheduled, sometimes by two or three weeks… We also maintain sufficient fuel stocks to meet the country’s requirements for around 20 to 30 days.”

He said there would be no further fuel price increase this month and advised motorists to use the nearest CPC station. Note that on 7 October the same chairman committed to no revision for three months; the Sunday Times reports only the narrower monthly assurance, and does not say whether the longer commitment still stands.

Not reported

No filing gives a timetable for the 75 stations, their locations, what they will cost, or whether they will be newly built or existing sites taken over. None says how a corporation already supplying over 80% of the country’s diesel will staff and stock them.

None of the three companies has responded to the minister’s statement that they may raise prices and have not, and none has answered the charge that stocks are being withheld. No filing reports what question the Attorney General has been asked, or when an answer is expected. Whether the tanker owners’ 20% claim was settled on Monday is not yet reported.

Sources: Daily Mirror, Sunday Times, Sunday Times (tanker charges).