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Supply of kerosene to be limited to certain areas: Gammanpila 

10 Nov 2021

  • Says daily demand doubled
By Shenal Fernando The supply of kerosene to areas where fishing and agriculture are not prevalent industries will be limited due to the prevailing kerosene shortage in the country, announced Minister of Energy Udaya Gammanpila at a press conference on Tuesday (9). Commenting on the kerosene shortage observed in the country over the past few days, Gammanpila claimed that Sri Lanka traditionally doesn’t possess a significant kerosene demand, and that such limited local demand for kerosene largely originates from persons engaged in the fishing and farming professions. Explaining further, he claimed that no product called kerosene is sold in the world market, and that it is only available on the world market as jet fuel, which is comparatively expensive. Therefore, the local demand is supplied through the domestic refining of crude oil.   Currently, the daily demand for kerosene is 550 metric tonnes (MT), which represents a 100% increase compared to the demand observed traditionally. According to Gammanpila: “There are three primary reasons for the increase in daily demand for kerosene. They are, the significant gap in prices between diesel at Rs. 111 and kerosene at Rs. 73, which has resulted in the utilisation of kerosene to power industrial machines and buses; the frequent disruptions in supply of LPG gas to the domestic market has caused households to stock up on kerosene; and finally the significant price gap between LPG gas and kerosene has prompted households to utilise kerosene stoves for cooking.” He further provided that the recent rumor of a 72-hour electricity blackout from 3 November to be imposed by the Ceylon Electricity Board trade unions has influenced many persons islandwide to purchase a kerosene lamp and kerosene. Therefore, this islandwide increase in demand for kerosene, which traditionally had possessed limited demand linked to certain professions, and the absence of an alternative in the world market to the kerosene refined locally, has resulted in Sri Lanka facing a kerosene shortage, he claimed. “At present, kerosene in Sri Lanka is sold by the Ceylon Petroleum Corporation (CPC) at a loss of Rs. 33 per litre, which translates to a daily loss of Rs. 23 million for the CPC by the sale of kerosene alone. Such a significant daily loss is borne by the CPC to sell kerosene at a subsidised price for the purpose of providing some relief to farmers and fishermen. However, the CPC doesn’t have the capacity to provide such a relief to bus and company owners due to the fact that the CPC has become the most debt-ridden and largest loss-making public corporation in the country. The CPC has fallen to such a position not due to corruption, but as a result of supply of fuel at prices below our cost,” he added. Therefore, he claimed, the supply of kerosene to areas where fishing and agriculture are not prevalent industries will be limited, as its continued misuse by businessmen will inevitably lead to a situation where it would be impossible to continue to grant this relief to persons who actually require it.


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