Fuel distributors’ protest: CPC amenable to negotiations

Ceylon Petroleum Corporation (CPC) Chairman D. J. Rajakaruna says he is ready to negotiate with fuel distributors who are opposing the calculation of their commissions based on a new formula.However, he warned that any attempt to sabotage fuel distribution would be severely dealt with according to the law.

Speaking to the media, Rajakaruna said that, as of Saturday, fuel dealers across the country had placed a total of 2,924 orders. He said that while some fuel dealers had suspended petroleum distribution in protest against the reduction in dealers’ commission margins, not all dealers were involved in the protest.

By Saturday morning, 1,696 orders had been placed by CPC dealers, 471 from Indian Oil Corporation dealers, 391 from Sinopec dealers, and 366 from RM Park Shell dealers.

Despite the protests, Rajakaruna assured that orders would continue to be processed throughout the week to meet the demand, which had increased due to panic buying.

The protests began after an association of CPC fuel dealers announced that they would stop placing orders following the reduction in their margins. They also stated they would halt providing fuel on credit to state agencies and hospitals, a practice they had maintained for several months.

Rajakaruna said that dealer margins had increased significantly in 2022 due to the economic crisis. When attempts were made to reduce the margin thereafter, dealers had taken matter to court, and had the CPC decision suspended. He noted that the court order had expired, and the CPC had since implemented the new formula to adjust margins, offering higher margins to smaller petrol stations, particularly in far-flung areas with lower business volumes. Additionally, new dealers were granted higher margins for five years to help them recover their capital costs.

However, Rajakaruna emphasized that the CPC was open to further discussions with dealers. He said that the 3% dealer margin set in 2022 included taxes, which had not been the case in previous years.