• CPC blames panic buying, hoarding for 10 March price increase
• Diesel stocks secured until mid-April, petrol supply until early June
• Multiple April shipments confirmed from Singapore and other unaffected regions

The Ceylon Petroleum Corporation (CPC) has confirmed that no fuel price revision will take place on Tuesday (31), despite the date being scheduled for price revisions under the pricing formula. 

The monthly fuel price revision typically occurs at midnight on the final day of each month.

Addressing a media briefing at the Department of Government Information yesterday (28) on the country’s fuel management amid ongoing tensions in the Middle East, CPC Chairman Janaka Rajakaruna said that the recent price increase implemented on 10 March had been driven primarily by panic buying and hoarding, rather than a genuine increase in consumption.

He noted that fuel stocks intended for later in the month had been depleted within the first 10 days due to a surge in public demand. “The main reason was the unnecessary panic among the public, who feared a fuel shortage and began hoarding, leading to long queues,” he said.

“We initially released 57,000 MT of diesel and 47,000 MT of petrol. Normally, we issue stocks based on what we received the previous month, but a large portion of the stocks intended for the third month was consumed within the first 10 days. This necessitated the first price hike because we then had to sell fuel received at higher March prices,” he explained.

Rajakaruna stressed that the spike in demand was not reflective of actual usage. “The surge in demand was not due to actual consumption; vehicles weren’t burning more fuel, it was due to distribution and hoarding. People were collecting fuel in containers, and some were even involved in black market activities,” he said.

He further pointed to sharp increases in global fuel prices as the underlying structural challenge. “The primary cause of this issue is the increase in global market prices due to the war. I have previously shown how prices have risen since October, and they continue to trend upward without decreasing. This applies to finished products like petrol and diesel, as well as crude oil,” he said.

Providing comparative data, Rajakaruna said that between the previous month and up to 20 March, petrol prices had increased by $ 9.27, while diesel had risen by $ 85.25 and kerosene/jet fuel by $ 97.01. “Because of these increases, we faced a cash flow problem and could not sustain further supplies without a price adjustment,” he added.

He also warned of emerging supply-side uncertainties, noting that scheduled crude oil shipments had been delayed or rendered uncertain. “We observed a serious potential situation regarding future supplies, which is why we called for spot tenders. We noticed that a ship with 90,000 MT of crude oil due on 23–24 April would not arrive. Another ship due on 10–11 April is also uncertain,” he said.

Highlighting the cost pressures, he noted that procurement premiums had surged sharply. “When we called for tenders, we were clear that we could last until mid-April. While suppliers were willing to provide fuel, the premiums, freight, insurance, and profit which are usually under $ 5, had risen to over $ 50. Every $ 1 increase in premium roughly translates to an increase of Rs. 2 per litre; therefore, a $ 50 increase means a rise of over Rs. 100 per litre,” he explained.

Despite these constraints, Rajakaruna claimed that sufficient fuel supplies had been secured through confirmed shipments. He detailed that multiple consignments of diesel, petrol, jet fuel, and furnace oil were scheduled to arrive throughout April from suppliers in regions largely unaffected by the conflict. 

“These shipments are coming mainly from Singapore and other unaffected regions. All are from registered suppliers with million-dollar bonds and opened Letters of Credit (LCs). Therefore, diesel is guaranteed until mid-next month and petrol is guaranteed until the start of June,” he said.

He added that sufficient furnace oil stocks were also available to support electricity generation, ensuring that power cuts would not be necessary. Looking ahead, Rajakaruna said that additional crude oil shipments were expected in May and June, while discussions were ongoing with India and Russia to secure emergency supplies, although technical and logistical challenges remained.

“We have discussed emergency supplies with India, though they also face challenges. We received an offer for furnace oil from them, but the sulphur content was too high for our specifications. Discussions are also ongoing with Russia regarding payment methods and logistical barriers,” he said.

Responding to concerns about pricing, he clarified that while the standard fuel pricing formula was in place, deviations had been made in March due to extraordinary circumstances. “While the formula is the standard, we deviated on 10 and 22 March due to the abnormal situation caused by the war.”

He further revealed that the CPC continued to incur losses despite the adjustments. “Currently, the CPC incurs a loss of Rs. 32 per litre of petrol and Rs. 204 per litre of diesel. The Government is bearing a significant portion of this cost,” he added.