•  A strategic risk that SL can no longer ignore
• The economic consequences extend beyond the aviation sector
• Aviation fuel is part of the strategic national infrastructure

Sri Lanka has spent the past four years rebuilding confidence after one of the worst economic crises in its history. Tourism has recovered remarkably. Export industries are regaining momentum. Airlines have gradually restored frequencies, while the Government continues to position the country as a regional aviation and logistics hub. Yet, beneath this encouraging recovery lies a strategic vulnerability that has received remarkably little public attention. The entire supply chain of Jet A-1 aviation fuel, the lifeblood of commercial aviation, continues to depend almost entirely on a single State-owned enterprise, the Ceylon Petroleum Corporation (CEYPETCO/CPC). 

Unlike most major international airports, Sri Lanka has neither competing aviation fuel suppliers nor multiple into-plane (ITP) service providers. More importantly, the country still lacks modern import infrastructure, dedicated marine unloading facilities, strategic storage capacity, and sufficient redundancy to protect against major supply disruptions.

For an island economy that depends heavily on aviation for tourism, exports, investment and international connectivity, this represents far more than a commercial issue. It is a national economic security concern.

Aviation fuel Is a critical national energy source

Every arriving tourist, every shipment of high-value exports, every international business traveller and every emergency humanitarian flight depend on a continuous supply of aviation fuel. Unlike shortages of retail petrol and diesel, any disruption to the supply of Jet A-1 aviation fuel has immediate and far-reaching consequences for international connectivity. Airlines depend on a reliable and uninterrupted fuel supply to maintain scheduled operations, and even a temporary disruption can significantly affect flight planning, airport operations and passenger confidence.

In the event of a supply interruption, airlines may be compelled to cancel or delay flights, while some operators may resort to “fuel tankering”, uplifting additional fuel from overseas airports to avoid refuelling in Sri Lanka. Although this provides a temporary operational safeguard, it increases aircraft weight, fuel consumption, operating costs and carbon emissions. Cargo operators may reroute flights through alternative regional airports with more reliable fuel availability, while airlines reviewing future network expansion may reconsider deploying additional capacity to destinations where fuel security cannot be assured.

The economic consequences extend well beyond the aviation sector. Tourism, one of Sri Lanka’s largest sources of foreign exchange, depends heavily on reliable international air connectivity. Any uncertainty surrounding aviation fuel availability can undermine the country’s reputation as a dependable destination, discourage airlines from increasing frequencies and reduce visitor confidence. Similarly, exporters of high-value and time-sensitive products, including fresh produce, seafood, pharmaceuticals and garments, face shipment delays, increased logistics costs and the potential loss of international markets. What may initially appear to be an operational issue within the aviation sector can therefore rapidly cascade across the wider economy, affecting trade, investment, employment and national economic resilience.

Aviation fuel therefore deserves to be treated as strategic national infrastructure rather than merely another petroleum product.

SL has successfully liberalised other fuel markets

Ironically, Sri Lanka has already demonstrated that competition strengthens energy security.

Following downstream petroleum market liberalisation, the Indian Oil Corporation entered the Sri Lankan market in 2002. More recently, Sinopec and RM Parks/Shell were awarded licences to import, distribute and retail petroleum products.

The result has been the greater diversification of supply sources, increased private investment and improved resilience against international supply shocks.

During recent geopolitical tensions in the Middle East (ME), this diversified downstream market significantly reduced Sri Lanka’s dependence on a single importer. Yet, aviation fuel remains almost entirely outside these reforms.

The contrast is even more striking when one considers that Sri Lanka has approximately 20 licensed marine bunker suppliers competing in the bunkering market, while more than 30 companies participate in the lubricants sector.

Competition already exists across much of the petroleum industry. Only aviation fuel remains effectively monopolised.

A single point of failure

Modern supply chains are no longer designed around efficiency alone. 

In the aftermath of the Covid-19 pandemic, the Russia–Ukraine conflict, disruptions to shipping through the Red Sea, and recurring geopolitical tensions in the ME, economists and supply chain experts increasingly recognise that the world has entered an era of persistent supply chain volatility. Rather than viewing such disruptions as isolated events, those are now regarded as recurring features of the global economic landscape that governments and businesses must proactively anticipate and manage.

Against this backdrop, Sri Lanka continues to rely on a single supply chain with limited redundancy for one of its most strategically important energy products, Jet A-1 aviation fuel. Such dependence creates an obvious single point of failure. Any disruption affecting fuel procurement, international shipping, marine discharge facilities, storage infrastructure, pipeline systems or operational processes could significantly affect the continuity of aviation fuel supplies. Given the country’s heavy reliance on international aviation to sustain tourism, exports, foreign investment and global connectivity, such a vulnerability represents not merely an operational concern but a significant strategic risk to the national economy.

International best practice has already moved on

Most international aviation hubs do not rely on a single aviation fuel supplier. Airports such as Singapore’s Changi, Dubai (United Arab Emirates), Hong Kong, Amsterdam Schiphol (the Netherlands), London Heathrow (England) and many major airports in North America and Europe operate common-user fuel infrastructure that allows multiple suppliers to access shared storage tanks, pipelines and hydrant systems.

The International Air Transport Association has consistently argued that aviation fuel infrastructure should encourage competition wherever possible because supplier diversity improves resilience and reduces operational risk. It further notes that fuel shortages and inadequate storage facilities can impose significant costs on airlines through delays, fuel tankering and schedule disruption. 

Infrastructure is the missing link

Another concern lies in the physical infrastructure itself.

Sri Lanka still relies on ageing petroleum handling facilities that were never designed for today’s aviation fuel demand or the country’s future ambitions as a regional aviation hub.

Sri Lanka’s aviation fuel infrastructure also warrants urgent attention. The country continues to operate with limited dedicated facilities for the marine importation and discharge of Jet A-1 aviation fuel, while the existing storage capacity remains constrained in relation to the growing demands of the aviation sector. Much of the supporting pipeline and fuel handling infrastructure is ageing and requires significant modernisation to meet contemporary standards of efficiency, reliability and resilience.

Equally concerning is the absence of sufficient redundancy within the import and distribution network. The lack of alternative discharge facilities and backup infrastructure means that any operational failure, maintenance issue or external disruption could have an immediate impact on the continuity of aviation fuel supplies. These shortcomings should not be viewed merely as engineering or infrastructure deficiencies. Rather, they represent strategic vulnerabilities that directly affect Sri Lanka’s national resilience, energy security and ability to sustain uninterrupted international air connectivity, particularly during periods of global supply chain disruption or geopolitical uncertainty.

Instead, the challenge now is extending that same reform philosophy to aviation fuel infrastructure where the strategic need may be even greater. 

The cost of inaction

Sri Lanka has consistently articulated its ambition to position itself as a regional aviation, logistics and tourism hub by capitalising on its strategic location in the Indian Ocean. However, achieving this vision requires far more than expanding airport terminals or constructing additional runways. Modern aviation hubs are built not only on physical infrastructure but also on the reliability, efficiency and resilience of the entire aviation ecosystem.

When airlines evaluate destinations for expanding services or establishing long-term operations, they assess the overall operating environment rather than airport infrastructure alone. These considerations increasingly influence route planning, fleet deployment, network expansion and long-term investment decisions.

Accordingly, if Sri Lanka is serious about becoming a competitive regional aviation hub, it must ensure that its aviation fuel supply chain is as resilient and internationally competitive as the airports that it seeks to promote. A world-class aviation hub cannot be sustained without a secure, diversified and future-ready fuel infrastructure capable of supporting uninterrupted air connectivity under both normal operating conditions and periods of global disruption.

A country cannot realistically aspire to become an aviation hub while maintaining a single-source aviation fuel supply chain with limited redundancy.

A practical way forward

Addressing Sri Lanka’s aviation fuel vulnerability does not require dismantling or diminishing the role of the CPC. On the contrary, the CPC should continue to play a central and strategic role in the country’s aviation fuel supply chain. However, strengthening national energy security and operational resilience requires moving beyond reliance on a single supplier by introducing additional qualified participants under a transparent, competitive and well-regulated framework.

In line with international best practices, Sri Lanka should encourage investment in modern, dedicated infrastructure for the importation and discharge of Jet A-1 aviation fuel, while substantially expanding strategic storage capacity to safeguard against future supply disruptions. The establishment of common-user fuel farms and shared hydrant systems would enable multiple qualified suppliers to operate efficiently using the same infrastructure, eliminating the unnecessary duplication of investment while providing airlines with greater commercial choice and supply security.

The regulatory framework should also permit qualified operators to import and supply Jet A-1 fuel under stringent international quality, safety and environmental standards, while licensing multiple ITP service providers at the country’s international airports. In parallel, mandatory contingency planning, minimum strategic reserve requirements and robust business continuity protocols should be incorporated into the national aviation fuel supply framework to ensure uninterrupted operations during periods of geopolitical instability, natural disasters or global supply chain disruptions.

Such reforms would not weaken the CPC; rather, they would complement its role by creating a more resilient, competitive and secure aviation fuel ecosystem governed by international aviation fuel standards and regulatory oversight capable of supporting Sri Lanka’s long-term ambition of becoming a regional aviation, logistics and tourism hub.

Learning from SL’s own success stories

Sri Lanka need not look beyond its own experience for evidence that well-designed reform can produce lasting economic benefits. The Port of Colombo has emerged as one of South Asia’s leading transhipment hubs because successive Governments embraced international partnerships, modern terminal operations and competitive private investment. Similarly, the telecommunications revolution transformed a sector once characterised by lengthy waiting lists and limited access into one offering widespread and internationally competitive mobile connectivity.

Private participation has also contributed significantly to the development of banking, insurance, tourism and export manufacturing. Many of these reforms initially encountered scepticism and resistance. However, they ultimately demonstrated that responsible private participation, when supported by effective regulation and public oversight, can expand the national capacity, improve service quality, introduce new technologies and deliver better outcomes for consumers and businesses.

Independent power producers contributed additional generating capacity during periods when public investment alone could not meet the rapidly growing electricity demand.

The lesson is not that every public asset or strategic sector should be privatised. Rather, it is that the Government performs most effectively when it focuses on policymaking, regulation, coordination and oversight, while creating space for responsible private investors to mobilise capital, technology, expertise and innovation. This balanced approach should guide the development of Sri Lanka’s next generation of strategic infrastructure.

A strategic decision

The question facing Sri Lanka is not whether another global disruption will occur. Recent history suggests that it almost certainly will.

The real question is whether the country chooses to prepare before the next crisis arrives.

Energy security today is measured not merely by the ownership of assets, but by the diversity of supply, the redundancy of infrastructure and the resilience of systems.

Sri Lanka has already embraced this philosophy in much of its petroleum sector.

Extending the same approach to aviation fuel may prove to be one of the country’s most important strategic investments in safeguarding tourism, exports and long-term economic growth.

History does not judge nations by the problems that they inherit, but by the wisdom and courage with which they choose to resolve them. Sri Lanka is today paying the price for decisions that were delayed, avoided, or simply never made. The question now is not whether those mistakes occurred, but whether we have the foresight to ensure that they are not repeated. The decisions taken or neglected today will define our economic resilience, national security, and competitiveness for decades to come. Future generations will not judge us by our intentions, but by whether we had the conviction to act when the opportunity still existed.

The writer is a Sri Lankan senior administrator, former corporate leader, and political commentator. Held key leadership roles

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The views and opinions expressed in this column are those of the author, and do not necessarily reflect those of this publication