By Shiran Ranasinghe
A significant number of fuel filling station owners had stopped placing orders with the Ceylon Petroleum Corporation (CPC) due to an announcement by Energy Minister Kanchana Wijesekera that fuel prices would be significantly reduced in the first week of April.
According to a spokesperson for the Fuel Distributors’ Association of the CPC, a reduction of approximately Rs 100 per litre of fuel would result in a loss of Rs 660,000 from a 6,600 liter bowser.
As a result, orders for fuel had dropped by approximately 50%, as a senior CPC official said, noting that the government should avoid making advance announcements about fuel price revisions.
He said quees would have formed near filling sttions in the first week of April even without the CPC strike, for gas stations had not placed orders due to the expected price reduction.
In a recent address to Parliament, Minister Wijesekara announced a significant reduction in fuel prices at the next revision, slated for April in accordance with the fuel price formula.
The minister attributed the potential for lower prices to the receipt of an IMF bailout, which would allow the government to procure fuel shipments at reduced rates through competitive bidding. He also noted that Sri Lanka had previously faced challenges in opening Letters of Credit and obtaining credit facilities, as the country was unable to provide guarantees to fuel suppliers.
With the IMF bailout, however, the government would be able to procure fuel at lower prices and secure long-term credit facilities. Furthermore, the minister noted that global fuel prices had decreased and the Sri Lankan rupee had strengthened against the US Dollar, which were favorable factors for reducing fuel prices.
Overall, the minister expressed confidence that the impending price reduction would have a noticeable impact on the public.