While there was an expectation that fuel prices would increase again in Sri Lanka, the current fuel prices can continue unchanged until the end of this month, according to the Chairman of the Sri Lanka Petroleum Corporation T.J. Rajakaruna said. He said this at a press conference held today.
Due to changes in fuel prices in the international market and ongoing tensions in the Middle East, questions about fuel prices in Sri Lanka continue to arise. Especially as long queues were again seen in front of fuel stations in some areas recently, there was a fear among the people that the fuel stock in the country has decreased.
However, according to the statement issued by the head of the Petroleum Corporation, there is no major problem with the country’s fuel reserves at present. He said that fuel stocks are being reviewed every Tuesday and additional fuel import operations are being undertaken considering the demand.
This means that there is no need to look at the current situation as a country-wide fuel crisis like in 2022, the officials explained. But it is also clear that the temporary scarcity faced by people in some areas cannot be ignored.
Reasons scarcity in some areas?
Along with the announcement regarding fuel prices, the supply situation is getting a lot of attention right now. The head of the Petroleum Corporation said that there is a possibility of temporary shortage in some areas in case the fuel companies reduce their supply. He said that around 62 areas have already been identified for this and an agreement has been reached with the concerned companies to provide additional fuel to those areas.
This issue is considered important. Because when a fuel station is out of service in an area, motorists from that area seek another station nearby. As a result, more people gather there than usual. Next the stock at that station may also deplete rapidly. Thus even a small supply disruption can turn into a long queue in a matter of hours.
Recently, there were reports of reduced supply at fuel stations of private companies in some areas including Colombo. Industry sources said that the current price structure is affecting private companies and due to this, some companies have restricted supply. Meanwhile, it has been reported that there is no shortage of fuel in many stations owned by the Sri Lanka Petroleum Corporation.
Because of this, a point that is being repeated now and again becomes clear. It is not enough to have fuel reserves in the country. It is also important that the fuel reaches the right areas at the right time. Even if the stocks are at central stations, if there is a disruption in supply, it will be known to the public as a shortage.
At the same time, the situation may become more complicated if the public tries to conserve fuel with undue fear. When rumors of a fuel shortage spread, people flock to the stations at the same time, temporarily increasing demand. This can also be a reason for the formation of queues.
An effort to avoid price hikes and the next plan
The announcement that the current fuel prices can be maintained till the end of this month may bring some relief to the public. At the same time, the Chairman of the Petroleum Corporation said that if there is no major external impact in the next three months, the current price and supply level can continue.
The government’s diesel subsidy scheme is also behind this. A total of Rs 40.65 billion is planned to cushion the impact of the diesel price hike in October, November and December. Of this, 15 billion rupees will be allocated for October, 13.5 billion rupees for November and 12.15 billion rupees for December.
The government said the move was aimed at not transferring the entire burden to the public immediately even if the price rises in the international market. Especially since diesel price is directly related to transportation, agriculture, freight distribution and various economic activities, its price hike may also affect the cost of various goods and services.
However, if the international market situation persists, the long-term control of domestic prices may put a financial burden on the government. The International Monetary Fund has said that domestic fuel prices should reflect international market changes to deal with fuel price shocks caused by the ongoing Middle East conflict, while providing targeted protection to vulnerable populations.
Thus, the current announcement cannot be viewed as just information on fuel price changes. On the one hand there is a need to control the prices and provide immediate relief to the people. On the other hand, the government also has the responsibility to manage fuel import and supply without affecting the country’s finances in the long run.
Taking the current information together, officials are of the view that there is no immediate fuel stockpile crisis in the country. However, temporary shortages may occur due to reduced supply in some areas. Steps have been taken to provide additional fuel to the identified areas and steps have been taken to urgently import two more fuel ships to meet the demand.
So, what the public needs to focus on now is the smoothness of fuel supply rather than the fear of price hikes. Future fuel prices and supply levels will be determined by how international market conditions change over the next few weeks and how the government reacts accordingly.