News
‘LIOC increases prices to cut down losses at CPC’s expense’
Huge increase in sales volumes disastrous for Ceypetco – CPC chairman
By Shamindra Ferdinando
Ceylon Petroleum Corporation (CPC) Chairman Sumith Wijesinghe says Lanka IOC has increased its fuel prices by Rs. 5 a litre to curtail its losses by making its customers obtain fuel from Ceypetco fuel stations.
Wijesinghe said so when The Island sought an explanation as regards the mechanism in place to revise fuel prices and whether Lanka IOC required the government permission to do so. Wijesinghe emphasised that Lanka IOC move was calculated to discourage customers coming to its fuel stations thereby would sharply increase financial losses on the state enterprise as its fuel was highly subsidised to protect the local consumer.
“In other words, the surge in sales volumes will automatically increase losses. The same result can be achieved by increasing petrol and diesel by just two rupees, each,” Wijesinghe said.
Responding to another query, Wijesinghe pointed out that Lanka IOC clearly sought to cut down on their losses by forcing its regular customers to visit Ceypetco fuel stations. The outspoken official said that as their competitor is on record as having said that they suffered a loss of Rs. 20 and Rs.40 per ltr, on the sale of petrol and diesel, respectively, Lanka IOC strategy was clear.
Lanka IOC is a subsidiary of Indian Oil Corporation which comes under the purview of Ministry of Petroleum and Natural Gas, is the only private party that operates fuel stations here.
CPC Chief said as a result of increased volume of sales their stocks would be depleted much faster. Wijesinghe described the situation as ‘grave’ and quite a concern to cash-strapped loss making public sector enterprise.
According to him, the problem was much worse than the public realised. The Indian strategy would cause a catastrophic situation, Wijesinghe said.
Wijesinghe admitted that Lanka IOC didn’t require Energy Ministry consent to revise fuel prices. The enterprise that entered the Sri Lankan market during Ranil Wickremesinghe’s premiership in 2003 is the eighth largest listed company here.
The official stressed that urgent revision of fuel prices was a dire necessity as the overall financial situation remained precarious. Ceypetco’s network of fuel stations is much larger than Lanka IOC’s.
Lanka IOC in a statement issued Thursday night said that the selling price of petrol and diesel here remained significantly low as compared to the prices prevailing in the neighboring countries. “The prices of petrol and diesel need to be in line with the prices prevailing in the international market,” the company said in a statement e-mailed to The Island.
Lanka IOC refrained from revising the prices of Lanka Super Diesel and LP 95. The previous price revision took place on June 12.
Asked whether Ceypetco would match the Lanka IOC’s price increase immediately to counter the competitor’s strategy, CPC Chairman said that the issue at hand required a thorough examination of the full picture as they couldn’t contain the rapid deterioration of the finances unless a substantial increase was implemented.
Claiming the mounting losses were unbearable, Managing Director LIOC Manoj Gupta said that the company had increased the prices to the barest minimum. Responding to The Island queries, Gupta said that Lanka IOC didn’t require GoSL approval to revise fuel prices. According to the Indian official, Lanka IOC had been empowered by ‘virtues of previously signed agreements with GOSL to take independent commercial decisions.“
As at Oct. 21 the international price of Gasoil 500ppm was at $ 95.62/barrel and Gasoline92 $ 99.37/barrel.
The last price revision took place on June 12, 2021. However, since then the Brent crude oil prices have increased from $72/barrel to $86/barrel in the international market.
Energy Minister Udaya Gammanpila on Oct. 15 revealed that when raised the possibility of Treasury assistance to the CPC with Finance Minister Basil Rajapaksa, he was told in no uncertain terms the Finance Ministry was not in a position to do so.
In the wake of simmering controversy over the fuel price hike announced by Minister Gammanpila on June 12 with General Secretary of the SLPP attorney-at-law Sagara Kariyawasam demanding the minister’s resignation, the latter declared that the revision of fuel prices was the prerogative of the Finance Minister.
Attorney-at-law Gammanpila explained that in his capacity as the Energy Minister, he only made the announcement of a decision taken at a meeting attended by both President Gotabaya Rajapaksa and Premier Mahinda Rajapaksa.
Asked by The Island yesterday (22) afternoon whether the Ceypetco would match Lanka IOC price hike immediately, Minister Gammanpila said ‘No.’
In terms of the 2003 agreement with the UNP government, Lanka IOC has the strategically located China Bay oil tank farm, the largest such facility situated between the Middle East and Singapore. The tank farm, formerly owned and operated by CPC, has 99 tanks, each with a capacity of 12,000 litres. Of them, only 15 of these tanks are operational at the moment.
Commenting on the ongoing talks with about half a dozen countries to ensure uninterrupted fuel supplies, the Pivithuru Hela Urumaya (PHU) leader Gammanpila said that the cabinet of ministers recently approved a proposal to obtain USD 3.6 billion loan from Oman to repay in 20 years with a five-year grace period. According to him, the Omani offer had been undoubtedly the best and the government was going ahead with it. The offer now before the cabinet of ministers would give the government an opportunity to use USD 500 mn overdraft to order refined products from India.
Minister Gammanpila said that there had been other offers from China, UAE and Singapore though at the moment they were committed to Omani and Indian proposals.
Asked to explain the Indian offer, Minister Gammanpila said that USD 500 overdraft could be obtained with 4 percent interest payable in one year.
“Once settled, we’ll be eligible for USD 500 mn overdraft again.”
Latest News
Heat Index at ‘Caution level’ at some places in the Western, Sabaragamuwa, Southern and North-western provinces and in Monaragala and Mannar districts
Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 3.30 p.m. on 11 March 2026, valid for 12 March 2026.
The public are warned that the Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at
some places in the Western, Sabaragamuwa, Southern and North-western provinces and in Monaragala and Mannar districts.
The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.
ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.
Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well.
For further clarifications please contact 011-744649
News
Power sector reforms jolted by 40% pay hike demand
The government’s sweeping electricity sector restructuring programme ran into fresh turbulence yesterday, with authorities warning that meeting a 40 percent salary increase, demanded by striking power sector unions, could push electricity tariffs up by nearly 100 percent.
Chairman of the National Transmission Network Service Provider (NTNSP), Nusith Kumaratunga, issuing the warning at a media briefing, said the additional salary burden would significantly escalate operating costs in the newly formed power sector companies.
According to Kumaratunga, granting the 40 percent salary increase would raise the monthly wage bill by about Rs. 1.8 billion, amounting to nearly Rs. 22 billion annually, placing enormous pressure on the already fragile financial position of the electricity sector.
“If that additional burden is passed on to consumers, electricity tariffs may have to increase by close to 100 percent,” he said.
The briefing was organised by the management of the successor companies created following the restructuring of the Ceylon Electricity Board (CEB).
Kumaratunga said electricity sector trade unions had presented 64 demands in the wake of the restructuring exercise.
“Out of the 64 demands, 62 have already been agreed to,
while the remaining two have been referred to President Anura Kumara Dissanayake for discussion,” he said.
He explained that the majority of the demands related to the continuation of privileges previously enjoyed by employees under the CEB structure.
“During the initial round of discussions itself, the boards of directors agreed to 59 of those demands,” he noted.
Among the concessions already granted was the continuation of bonus payments, similar to those previously paid by the CEB, at least temporarily, until a performance-based incentive system is introduced.
The management had also agreed to grant an allowance of Rs. 11,000, in addition to the existing cost-of-living allowance, bringing the average additional monthly benefit to around Rs. 17,000 per employee, he said.
Kumaratunga stressed that management had approved all demands that could be granted at the ministerial level.
However, he said the proposed 40 percent salary increase would be difficult to justify, particularly at a time when other segments of the public service were not receiving similar benefits.
He also revealed that unions had requested that a 25 percent salary adjustment, granted to senior executives in 2024, be extended to all employees, with retrospective effect from January 1, 2024.
Granting such a request would require amending an existing Cabinet decision, which the boards of directors of the newly established companies do not have the authority to do, Kumaratunga explained.
He pointed out that the newly created electricity sector companies had only commenced operations on Monday, and their work had already been disrupted by the ongoing trade union action.
“It is difficult to understand why the strike continues when the vast majority of demands have already been addressed,” he said.
However, the Ceylon Electricity Board Engineers’ Union clarified that the 40 percent salary increase was not their primary demand.
Union representatives said that the electricity sector employees were originally due for a salary revision in January 2027, but the ongoing restructuring had raised concerns that the scheduled increase might not materialise.
“That is why we requested at least a reasonable percentage increase in order to secure some form of salary revision,” a senior electrical engineer said.
The dispute comes at a critical moment as the government presses ahead with the unbundling of the CEB into separate generation, transmission and distribution entities, a reform programme, officials say, is aimed at improving efficiency and attracting investment to Sri Lanka’s troubled power sector.
However, the restructuring has been strongly opposed by trade unions, which argue that the reforms could undermine employee security and weaken state control over a strategic national utility.
With industrial action continuing and tariff hikes looming as a possibility, the confrontation between the government and electricity sector unions appears set to intensify in the coming days.
By Ifham Nizam
News
UN scientific research ship here amidst ban on such vessels
A UN vessel arrived in Colombo yesterday (11) to conduct a month-long marine scientific survey in Sri Lanka’s Exclusive Economic Zone (EEZ). This is the first foreign scientific research vessel here since President Ranil Wickremesinghe banned such visits on January 1, 2024, for a period of one year. However, the ban remains in place with the NPP government yet to announce its new decision on the issue.
The following is the text of statement issued by the Foreign Ministry yesterday: “On the invitation of the Government of Sri Lanka, the United Nations-flagged vessel R/V Dr. Fridtjof Nansen, under the Food and Agriculture Organisation (FAO), is scheduled to arrive in Sri Lanka today to conduct a marine scientific survey in Sri Lanka’s Exclusive Economic Zone (EEZ) in collaboration with the Ministry of Fisheries, Aquatic and Ocean Resources and the National Aquatic Resources Research and Development Agency (NARA).
R/V Dr. Fridtjof Nansen supports countries in collecting critical scientific data for sustainable fisheries management and in understanding how climate change is affecting marine ecosystems. The survey, spanning 32 days, will focus on assessing marine living resources and marine ecosystems, providing updated scientific data that will support Sri Lanka’s sustainable fisheries management and ocean governance. During the mission, scientists will undertake a range of activities, including hydro-acoustic surveys to estimate the biomass and distribution of key fish stocks in Sri Lankan waters; assessment of marine pollution levels; and biodiversity monitoring.
An important component of the programme is capacity building. The mission will bring together Sri Lankan scientists from NARA and other national institutions with international experts, promoting scientific collaboration and knowledge exchange.
Sri Lanka previously hosted the R/V Dr. Fridtjof Nansen in 2018, when the vessel conducted a comprehensive survey of Sri Lanka’s continental shelf and upper slope, in collaboration with national institutions. Earlier, Nansen surveys were also carried out in Sri Lankan waters in 1978–1980, reflecting a long-standing scientific partnership under the Nansen programme.
Sri Lanka’s participation in this survey reflects the country’s continued commitment to sustainable fisheries, marine ecosystem protection, and international scientific cooperation in the Indian Ocean region.”
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