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Energy Secretary says LIOC free to adopt commercial pricing; CPC suffers further losses

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Consumers at LIOC and CPC filling stations in Kotahena recently. (Pic by Nimal Dayaratne)

Conflicting claims regarding Act No 35 of 2002

By Shamindra Ferdinando

Energy Ministry Secretary K. D. R. Olga yesterday (28) said that in terms of the agreement between Sri Lanka and India, Lanka India Oil Company (LIOC) could adopt commercial pricing.

The Ministry Secretary said so when The Island sought her response to several price revisions effeced by the LIOC recently.

LIOC and CPC (Ceypetco) sell a litre of petrol at Rs 303 and Rs 254, respectively. A litre of diesel is sold at Rs 176 at both LIOC and CPC service stations. The Indian enterprise is believed to be considering revising the price of diesel, as well.

SJB trade union spokesman and former CPC employee Ananda Palitha has repeatedly alleged that the LIOC has discouraged customers by maintaining a substantial price difference. Palitha insists that the absence of a pricing mechanism in terms of Act No 35 of 2002 has been to the disadvantage of the CPC. Ananda Palitha has challenged political parties represented in Parliament to explain why the proposed mechanism couldn’t be established over the past 20 years.

The Act, enacted during Ranil Wickremesinghe’s premiership, in 2002, provided for the establishment of the Public Utilities Commission of Sri Lanka to regulate certain public utilities, including petroleum, electricity and water.

However, Energy Secretary Olga emphasised that LIOC enjoyed the freedom to decide on a pricing formula on its own. According to her, the Energy Ministry couldn’t intervene in the LIOC decision-making process. The LIOC entered the local market during Wickremesinghe’s tenure as the Premier in 2003. At the onset of its operation here, the LIOC took over one third of the service stations, belonging to the CPC. Since then, the LIOC has expanded its operations here.

SJB lawmaker Mujibur Rahuman said that in spite of repeated assurances to restore an uninterrupted fuel supply, consumers had been severely inconvenienced. The Colombo District MP pointed out that people had blocked the Colombo-Negombo road at Kapuwatte yesterday (28), asking the government to make fuel freely available. Responding to another query, MP Rahuman said the Presidential Media Division (PMD) and the Energy Ministry had repeatedly promised to normalise the fuel supply, though long queues in Colombo and its suburbs as well as the provinces proved the crisis still prevailed.

Lawmaker Rahuman said that contrary to government claims, countrywide fuel shortages continued with many LIOC and CPC service stations remaining closed. Some issued only petrol.

Referring to a recent media statement issued by the Tourism Ministry regarding efforts made by the relevant authorities to normalise fuel distribution in the Gampaha district, MP Rahuman said those in authority seemed either clueless or utterly irresponsible.

MP Rahuman asked whether the fuel distribution and the power supply had improved after President Gotabaya Rajapaksa brought in Gamini Lokuge in place of Energy Minister Udaya Gammanpila in the first week of March. The situation has deteriorated to such an extent now the government would have to consider extending ongoing power cuts, MP Rahuman said. According to him, the recent declaration made by the Energy Ministry pertaining to a sharp drop in water levels, in all reservoirs, indicated that power cuts could be further extended soon.

MP Rahuman said that the CPC and Laugfs had no alternative but to match the LIOC’s petrol prices soon. The MP pointed out that the CPC always matched the LIOC prices.



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Diesel replacement costs up to Rs. 4.5 bn in April

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Norochcholai Power Plant

Coal power generation falls by 27 GWh

A sharp decline in coal-fired electricity generation in April 2026, compared to the corresponding month last year, may have cost Sri Lanka more than Rs. 4.5 billion, as the country was compelled to rely on significantly more expensive diesel-powered generation to make up the shortfall, according to power sector data.

The coal-based electricity generation, in April 2026, was 27 GWh lower than in April 2025, a development that has sparked concern among energy experts and economists over the mounting financial burden on the country’s already strained power sector.

Industry calculations reveal that generating the lost 27 GWh through diesel-fired power plants would require approximately 8.1 million litres of fuel, based on a standard consumption rate of 0.3 litres per kilowatt-hour.

With fuel costs estimated at around USD 286 per barrel, or roughly USD 1.80 per litre, the replacement power would have cost approximately USD 14.57 million. At the prevailing exchange rate of about Rs. 315 to the US dollar, the bill exceeds Rs. 4.5 billion for April alone.

Energy sector analysts say the figure highlights the enormous economic value of maintaining high availability at coal-fired power plants, particularly at a time when Sri Lanka is seeking to reduce electricity costs and strengthen energy security.

“The financial impact of losing low-cost coal generation is substantial. Every unit not generated by coal has to be replaced by a much more expensive source, usually diesel or fuel oil, which ultimately affects the finances of the power sector and the wider economy,” a senior energy analyst said.

Even under a more conservative calculation, based on the average electricity generation cost of around Rs. 72 per unit recorded in 2025, the loss remains significant. The 27 million units not generated from coal would translate into an additional cost burden of nearly Rs. 2 billion.

The decline in coal generation comes at a critical juncture for Sri Lanka’s energy sector.

 The government has repeatedly emphasised the need to maintain affordable electricity tariffs, while reducing dependence on imported fossil fuels and expanding renewable energy capacity.

Experts warn that any sustained reduction in low-cost baseload generation could undermine these objectives, increasing the need for costly thermal power and placing additional pressure on foreign exchange reserves.

The latest figures are expected to intensify scrutiny of generation planning, fuel procurement strategies and the operational performance of major power plants. They also underscore the importance of ensuring uninterrupted operation of coal-fired facilities until sufficient renewable and storage capacity is available to replace them reliably.

With the country striving to maintain economic stability and energy affordability, analysts argue that avoiding such generation shortfalls must remain a top priority for policymakers and power sector planners.

By Ifham Nizam

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Sallay on hunger strike: Counsel warns CID

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Sallay

Asith Siriwardena Counsel for former Director of State Intelligence Service, Major General (Retd.) Suresh Sallay, detained under the Prevention of Terrorism Act (PTA) over the 2019 Easter Sunday attacks, has called upion the Director of the CID, SSP G. S. Abeysekara, to transfer his client either to a private or government hospital to receive urgently needed teatment.

Sallay was on a hunger strike, claiming mistreatment by the CID, his wife said, after visting him, yesterday.

Siriwardena wrote to the CID Director yesterday (07) after Sallay was visited by his wife, son and brother.

The text of the letter: “The family observed that Mr. Sallay’s physical condition has deteriorated to an alarming and critical level.

“He is reportedly unable to attend the visitation without the physical assistance of two officers. During the visit, he informed his family that he had refused medication, saline, food, and water. He further expressed a belief that his death is imminent and requested that arrangements be made for the donation of his eyes. He also requested an immediate visit from his Attorney for the purpose of executing his last will and other related legal documentation.

“These statements, and circumstances, demonstrate a grave deterioration in his physical and psychological condition. It is apparent that he is no longer capable of making rational decisions concerning his own welfare, health, and survival.

The prolonged conditions, under which he is presently being held have, at the very least, created a serious and immediate risk to his life.

“The State assumes a non-delegable duty of care toward every person held in its custody. Once an individual is deprived of liberty, the responsibility for safeguarding that person’s life, health, and wellbeing rests squarely upon the authorities exercising control over that individual. Any failure to discharge that duty in the face of a known and imminent medical emergency is a matter of the utmost legal seriousness.

“You are hereby formally notified that Mr. Sallay requires immediate medical intervention by qualified independent medical professionals and urgent transfer to an appropriate hospital facility capable of providing comprehensive assessment and treatment. Any delay, refusal, or failure to act despite clear knowledge of his precarious condition may give rise to personal and institutional liability under the criminal and civil law of Sri Lanka

“Should General Sallay suffer irreversible injury or death while remaining in the present conditions despite this explicit warning, it will be open to the relevant authorities, courts, and investigative bodies to examine whether such conduct amounts to a deliberate disregard of a known and foreseeable risk to life. Those responsible for decisions concerning his continued detention and medical care may be required to account personally for their actions and omissions.

“Accordingly, I demand that:

1. Mr. Sallay be transferred forthwith to a government or private hospital equipped to provide urgent medical treatment;

2. He be examined immediately by independent medical specialists, including psychiatric professionals if necessary; His legal representatives and family be granted reasonable access to him;

3. A written update on his medical status and the measures taken for his protection be provided without delay. This letter constitutes formal notice. Any further failure to act despite knowledge of the circumstances set out herein will be relied upon in any future judicial, criminal, constitutional, or international proceedings arising from harm suffered by my client.”

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Opp. questions why Rs 10 bn meant for Ditwah victims held in Treasury account

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Sanjeewa

The Opposition says the NPP government should explain why the funds received by Rebuilding Sri Lanka haven’t been utilised to provide relief to those affected by Ditwah cyclone in late November last year.

The failure on the part of the government to utilise as much as Rs 10 bn, received from local and foreign donors, came to light when the National Audit Office (NAO) appeared before the Public Finance Commission recently.

The NAO told the House Committee that no statutory fund currently existed under the name “Rebuilding Sri Lanka” and the programme operated through an account maintained under the Deputy Secretary to the Treasury.

The NAO declared that no payments had been made through this account to date.

Former SLPP MP Sanjeewa Edirimanne said that until the disclosure made by the NAO the country had been led to believe the Rebuilding Sri Lanka fund provided post-Ditwah relief. Pointing out that JVP General Secretary Tilvin Silva’s declaration in Jaffna that funds allocated to hold Provincial Council polls

had been utilised to assist Ditwah victims, Edirimanne said such blatant lies were propagated while the government held on to Rs 10 bn meant for the disaster victims.SJB MP Mujibur Rahman questioned the rationale behind keeping funds received specifically for Ditwah victims still living under extremely difficult conditions. (SF)

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