Private tanker owners warn of derailing fuel distribution operations

If their new cost calculation price formula is not granted

by Suresh Perera

Private tanker (bowser) owners have threatened to cripple the distribution of fuel island-wide this week if they are not granted an increase in the cost calculation price per kilometer taking into consideration the recent fuel hike plus other related factors.

“We will pull out if there’s no response to the new price formula we have already submitted as we have to incur mounting financial losses in continuing to distribute fuel”, warned D. V. Shantha Silva, Joint Secretary of the Sri Lanka Petroleum Private Tanker Owners’ Association (SLPPTOA).

With the price of diesel pushed up by seven rupees per litre, there should be a sense of justice as tanker owners are taking a big hit in pushing ahead with fuel distribution operations across the country, he explained.

He said the new price formula was submitted by the SLPPTOA to the Ceylon Petroleum Storage Terminals Limited (CPSTL) and the Ceylon Petroleum Corporation (CEYPETCO), but there has been no favorable response so far.

“Apart from the enhanced cost of diesel, most tanker owners have monthly lease commitments to financial institutions. Under the circumstances, how can they continue to operate at a loss?”, he asked.

“We discussed the issue with Energy Minister, Udaya Gammanpila as well, but though he agreed in principle that the demand for an upward revision of the cost calculation price was reasonable, officials continue to drag their feet”, Silva complained.

“We will not report for duty this week if there’s no positive outcome as tanker owners can no longer absorb the losses and stay afloat”, he said.

With 800 tankers, the bulk of petrol, diesel and kerosene consignments are distributed countrywide by private operators as the CPC owns only a marginal 60 fuel carriers, Silva said. “We handle 90% of the distribution to filling stations in the country”.

Even where fuel is transported by rail to storage depots in provincial areas, the distribution to filling stations is undertaken by private tankers, the Joint Secretary elaborated.

In terms of the new pricing formula, the SLPPTOA has sought an enhanced Rs. 195/65 per kilometer for a 13,200 litre tanker, Rs. 269/28 for a 19,800 litre tanker and Rs. 356/01 for a 3,300 litre tanker.

The price per kilometer has been calculated by factoring in all inherent costs relating to fuel, servicing, depreciation, insurance license and bank guarantee, salaries, tyres and tubes, battery, running repairs and calibration.

“We have been seeking an increase to meet the enhanced running costs over the past three months and submitted three appeals in March and April this year, but to no avail. However, with the recent fuel price hike, we submitted a fresh cost calculation formula on June 14”, Silva said.

“The mark-up in the new pricing formula submitted by the private tanker owners is unrealistic”, a senior official asserted.

“If that’s the position, they can call us for a discussion to sort it out without remaining mum on our proposal”, Silva noted.

“We have decided to keep away from work if there’s no solution forthcoming”, he warned.