• Prices double to $ 4 per gallon; airlines impose surcharges

A sharp escalation in global Jet A-1 fuel prices, driven by the ongoing conflict in the Middle East, has doubled aviation fuel costs and pushed airfares to nearly twice their previous levels. 

Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku confirmed that while prices had surged significantly in the international market, the country’s fuel reserves and incoming shipments were expected to maintain uninterrupted operations.

“Regarding jet fuel, our checks last Monday (16) indicated that we possessed sufficient stocks to last 28 days. This means we currently have enough jet fuel on hand to sustain operations for approximately 21 more days,” he noted.

He added that Sri Lanka had also actively placed new orders: “As the President mentioned in his recent address, we have secured a jet fuel shipment scheduled for early April. We are confident that there won’t be any supply disruptions with jet fuel because our current reserves provide a secure buffer of 21 days and we expect another shipment to arrive prior to 10 April.”

He stressed that the primary impact of the crisis was financial rather than logistical, with airlines directly absorbing the increased cost of fuel.

The surge in fuel prices has placed significant pressure on SriLankan Airlines, with Chief Financial Officer and Acting Chief Executive Officer Yasantha Dissanayake warning of substantial financial strain.

“This price hike has a very serious financial impact on our operations. Jet fuel is one of our primary operational components and represents our highest singular cost. Therefore, when the price doubles, it causes a highly significant disruption to our financial planning,” Dissanayake said.

“Our operational costs have risen drastically, and unfortunately, this is an international market dynamic that remains entirely outside of our control. We are compelled to purchase fuel at whatever prices dedicated by the prevailing global rate,” he added.

“Compounding the issue is the fact that we have already sold tickets at previous rates, and we cannot retroactively increase the prices for those passengers. It is a highly unusual and unprecedented situation that we have not encountered before.”

He added that globally airlines had introduced fuel surcharges while maintaining passenger demand, except on routes directly affected by regional instability. 

“To mitigate these expenses, every airline operating globally is now imposing additional fuel surcharges to recover at least a fraction of this unexpected cost. In terms of passenger demand, we have not witnessed a significant number of cancellations. People who have travel requirements are continuing to fly,” he noted.

“The only cancellations we are experiencing are limited strictly to the Middle East, where airspace restrictions currently make travel impossible. Beyond those specific routes, passenger retention remains stable, and we have even added extra flights to European destinations to help diversify our revenue streams during this period,” he added.

According to Deputy Minister Kodithuwakku, the current market price is hovering at around $ 4 per gallon – a significant jump from the previous rate of approximately $ 2.25. 

“We are supplying airlines at this revised international rate, and consequently, they must base their ticket fares on these new figures. This direct pass-through of costs means that ticket fares have now escalated to nearly double their previous amounts,” he said. 

He noted, however, that despite the global fuel volatility, Sri Lanka’s maritime sector had not experienced disruptions.

“We are currently carrying out bunkering operations without hindrance. Although Sri Lanka has not yet developed into a primary bunkering hub like Singapore, the vessels that regularly call at our ports continue to do so without any changes to their schedules. While we acknowledge the existence of a broader fuel crisis, it has not yet generated any negative impact on either the local shipping industry or the aviation sector’s operational capacity,” Kodithuwakku assured.