March 01, Colombo (LNW): Ceylon Petroleum Corporation has assured that there was no fuel shortage the country and the dealers are ready to distribute petrol and diesel to service stations although motorist are rushing for panic buying due a strike of dealers making several demands
Fuel dealers from all companies in Sri Lanka including Ceylon Petroleum Corporation have placed 2,924 orders by Saturday, Charman D J Rajakaruna said after a group of dealers said they have halted fuel distribution in a protest over reducing margins.
By Saturday morning 1,696 orders had come from CPC dealers, 471 from Indian Oil Corporation network, 391 from Sinopec dealers and 366 from RM Park Shell dealers, he said.Rajakaruna said not all dealers were involved in the process.
Though orders are usually not taken after Saturday at 700 am, given that extra fuel was pumped by customers, orders would continue to be taken, he said.
Motorists started to queue up and pump fuel overnight after an association of CPC fuel dealers said they will not place orders after Friday due to a reduction in the dealer margin.
The dealers said they were providing fuel on credit for state agencies and hospitals for months at a time and they will also halt such activities.
Rajakaruna said the dealer margin rose to excessive levels in 2022 amid an economic crisis and when attempts were made to reduce the margin, dealers went to court and halted the process.
The court order has since expired, he said. The CPC came up with a new formula to give margins to dealers with higher margins for smaller petrol sheds, especially int the provinces who had less business volumes.
Newly set up dealers were also given higher margins for 5 years to help them recover capital costs, he said.However the CPC was prepared to meet dealers and discuss the issue further.Rajakaruna said the margin of 3 percent, had included taxes from 2022, but it was not so earlier
The Fuel Distributors’ Association said that existing fuel stocks at filling stations would last until Monday (3) morning, following the suspension of fuel ordering activities last night.
No new orders have been placed with the Ceylon Petroleum Corporation (CPC) since then for tomorrow’s fuel distribution. However, the association’s central committee has scheduled a discussion this evening and plans to gather at the Presidential Secretariat for a protest.
The decision follows the Ceylon Petroleum Corporation’s (CPC) move to abolish the 3% discount currently offered to distributors and implement a new payment formula, effective tomorrow, the association said.
The association also announced that fuel ordering will cease from midnight yesterday (28). While distribution of existing reserves will continue, no new orders will be placed, leading to a complete fuel shortage at filling stations by Monday (March 3).
Additionally, the association has decided to halt post-payment fuel supplies to government institutions. Previously, entities like police departments and hospitals were allowed to settle bills after one or two months, but as of yesterday, no fuel will be supplied on credit.
