• Says extra tenders floated to cushion potential supply disruptions
• Predicts indirect impact from shipping risks near Strait of Hormuz
• Govt. negotiating with suppliers to ensure uninterrupted fuel supply

Current projections by the Government indicate that fuel prices in Sri Lanka could remain unchanged during the upcoming April revision, if global market conditions remain stable following tensions in the Middle East.

The assumption follows a recent mid-month fuel price increase introduced as a precautionary measure against escalating international energy tensions.

Ceylon Petroleum Corporation (CPC) Managing Director Dr. Mayura Neththikumarage, explaining the current outlook in response to questions about the next fuel price revision, said: “Assuming there are no additional global shocks and current conditions persist, it is possible to maintain the present prices during the April revision.”

“Ultimately, prices will depend on the actual import costs and the stability of the global market. We have prepared our projections up to 1 April based on current income and expected costs, and if those conditions hold, the present fuel prices can be maintained,” he added.

The projections follow a recent mid-month fuel price hike of around 8%, which departed from the usual monthly pricing formula. Dr. Neththikumarage said the adjustment had been introduced early to reduce the likelihood of a sharper increase during the next revision cycle.

“Prices have increased globally and the market is experiencing significant volatility, which required us to adjust prices earlier. We would have had to revise prices by April in any case. By implementing an 8% increase now, we may be able to maintain these prices for the next two months. If we delayed the adjustment until the end of the month, the required increase could have reached 15%,” he said.

He added that early price adjustments could also help limit wider inflationary pressures in the economy.

“Even if fuel prices decline later, the prices of related goods and services rarely fall at the same rate. Once those prices increase, they tend to remain high. This early adjustment helps prevent a larger cascading effect on the broader economy,” he noted.

Sri Lanka’s economy, which remains heavily dependent on imported fossil fuels, has also been affected by global shipping disruptions linked to military activity in the Middle East. Several international freight operators have begun avoiding high-risk zones, creating uncertainty across energy supply chains.

Dr. Neththikumarage noted that while Sri Lanka did not directly rely on shipping routes through the Strait of Hormuz, wider disruptions in regional logistics were affecting suppliers and transportation networks.

“While we may not be directly affected by specific closures, our suppliers certainly are. As a result, there is an indirect impact on our supply chain. Shipping logistics, insurance premiums, and global pricing are all changing rapidly due to these risks,” he explained.

Deputy Minister of Energy Arkam Ilyas said the Government was engaged in ongoing diplomatic and commercial discussions with fuel-producing countries to ensure stable supply lines.

To manage potential supply disruptions and price volatility, the Government has introduced several precautionary measures, including forward purchasing and emergency tenders. The CPC has also adjusted its procurement strategy to secure supplies several months in advance while maintaining alternative sourcing options.

“Regarding our future planning, we have already scheduled orders for certain products up to June, some up to August, and some extending into September. Furthermore, we have floated a couple of additional tenders, specifically to mitigate emerging risks. This allows us to accommodate any unforeseen cancellations by immediately switching to an alternative supplier. 

“By raising these extra tenders, we have secured multiple options. If a disruption occurs, we can easily pivot and cancel specific tenders as needed. We are maintaining these additional backup tenders to ensure continuity,” Dr. Neththikumarage said.