Government Re-evaluates Private Fuel Distribution Contracts Amid Subsidy Extensions and Market Disruption

Sri Lankan President Anura Kumara Dissanayake said the government intends to revise agreements with private fuel companies. Several outlets reported the announcement; Sri Lanka Mirror said he made it at a National People’s Power rally in Ibbagamuwa on October 11. The reports describe the agreements as having been signed under earlier administrations.

Lanka Business Online says the review is linked to supply constraints and differences between prices at private outlets and those of the state-owned Ceylon Petroleum Corporation (CPC). It reports that private distributors sought diesel price increases of as much as Rs. 132 per litre and restricted distribution, while CPC’s share of diesel sales rose from 58% to 77%.

The same outlet reports that existing contract terms limit the government’s immediate legal options when companies restrict sales. It says the agreements have been sent to the Attorney General’s Department for a comprehensive legal review, with amendments being considered.

Lanka Business Online also reports that the government provided Rs. 60 billion in relief during the first five months of the year, including per-litre support for diesel and petrol. After a pause in September, it introduced a further Rs. 41 billion package for October to December, including a diesel subsidy. The outlet says CPC had recorded a net profit of Rs. 28 billion so far.

To support supply, the government plans to establish 75 additional CPC fuel stations in places currently dependent on private distributors, according to Lanka Business Online. The other reports focus on the president’s intention to revise the agreements and provide no further detail on the timing or final terms.

Written automatically by AI from the outlets’ own reports, and not reviewed by an editor. It can be wrong — the original report is the authority.