Sri Lanka’s Petroleum Distributors’ Association has written to President Anura Kumara Dissanayake seeking urgent intervention over the Ceylon Petroleum Corporation’s (CPC) revised fuel dealer commission structure, warning that the current mechanism threatens the viability of filling stations nationwide.
In the letter, the association said prior engagement with the CPC and other state institutions had failed to resolve the dispute, forcing escalation to the Presidential Secretariat.
At issue is CPC Circular No. 1109, issued on 25 February 2025 and implemented from 1 March 2025, which replaced the previous percentage-based commission with a fixed per-litre margin. Distributors argue the unilateral shift effectively caps dealer income within a narrow band that does not cover staff salaries, loan repayments, maintenance costs and other operating expenses.
Pressure is particularly acute for operators servicing bank loans, the association said, raising the risk of closures among both private and cooperative stations. It noted that around 98% of Sri Lanka’s fuel stations are run as private or joint ventures, and criticised the absence of prior stakeholder consultation on the pricing change.
Under the current framework, the CPC passes its costs into retail prices on a cost-recovery model. Distributors said that has created a structural imbalance, forcing retailers to absorb VAT payments, upfront cash purchases of fuel and rising working-capital requirements when prices move up, without a corresponding adjustment in per-litre earnings. Some private distributors operate on margins of around 3% of the selling price.
The association warned that if unaddressed the dispute could disrupt the fuel distribution network and consumer access, and called for an expert committee — with industry representation — to design a more sustainable and consultative pricing mechanism.
The dispute adds to pressure on the energy sector following the resignation of Energy Minister Kumara Jayakody and ongoing fuel-supply strains linked to the Middle East crisis.
