Sri Lanka’s maritime sector is currently navigating a substantial escalation in bunker fuel costs, with surcharges rising by nearly 23% in recent weeks.
Despite the sharp increase in these operational expenses, authorities maintain that both the Port of Colombo and the Port of Hambantota continue to operate at maximum capacity.
Government officials emphasise that fuel pricing is not the primary driver of transhipment traffic, ensuring the country remains a vital node in global supply chains despite external economic pressures and shifting maritime routes.
Speaking to The Sunday Morning, Ceylon Petroleum Corporation (CPC) Managing Director Dr. Mayura Neththikumarage said: “There are numerous private players operating in the bunkering sector. While the CPC acts as a supplier, we have not directly engaged in supplying bunker fuel during this current month.”
The 22.8% surge in bunker fuel surcharges has prompted valid concerns regarding the regional competitiveness of Sri Lankan ports. This issue is particularly relevant as global shipping routes continue to adjust to prolonged disruptions in West Asia. These disruptions have forced many vessels to reroute and reconsider their traditional refuelling stops.
Amid this severe international volatility, the CPC has notably reduced its direct participation in the bunkering market, leaving the sector largely in the hands of independent private operators.
Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku attributed the rapid surcharge increase entirely to global market dynamics rather than any domestic policy decisions or local taxation strategies.
He emphasised that Sri Lanka was bound by these global forces and had to price competitively within a completely open international market to attract maritime business.
“The bunker fuel surcharge reflects the broader increase in global bunker fuel prices. We supply fuel based on international market rates, as bunkering operates within a highly competitive open market. Unlike aviation fuel, shipping lines have the flexibility to seek the lowest prices across regional ports, whether in Singapore, South Africa, or Sri Lanka. We secure the business when we offer the most competitive rates,” Kodithuwakku explained.
Despite the rising refuelling costs that shipping lines must navigate, port throughput remains robust across the island. Port authorities and the ministry continuously underline that transhipment volumes are driven primarily by geographic positioning and logistical advantages rather than the immediate availability or pricing of marine fuel. The Government’s strategic focus remains heavily tilted towards physical infrastructure expansion to accommodate this steady flow of traffic.
“Both the Colombo and Hambantota Ports are currently operating at full capacity, and we are experiencing no shortage of transhipment business. To capitalise on future opportunities, we are prioritising infrastructure development, specifically the expediting of the East Container Terminal. It is imperative that we build capacity ahead of demand, as our current facilities are fully utilised. This capacity enhancement remains our core strategy moving forward,” Kodithuwakku stated.
He further noted that marine vessels possessed far greater flexibility in their refuelling decisions, allowing them to traverse vast distances and select the most economically viable ports for bunkering.
“There is no direct correlation between fuel availability and cargo transhipment volumes. Unlike aircraft, which must refuel upon landing, maritime vessels plan their routes across multiple ports to bunkers where prices are most advantageous. Consequently, ships will continue to call at Sri Lankan ports for transhipment regardless of local fuel availability. Providing bunker fuel simply serves as an added commercial advantage rather than an operational necessity for these vessels,” Kodithuwakku clarified.
To ensure long-term resilience and capitalise on future maritime traffic, the Government is looking beyond current spot market prices. According to Kodithuwakku, the overarching strategy involves significant capacity enhancements, including the construction of new storage tanks at the Sapugaskanda refinery and the Jaya Container Terminal (JCT) Oil Bank, to maintain a solid buffer and preserve the nation’s strategic advantage during any future global procurement delays.