The government has authorised 11 companies holding valid bunker licences to independently import fuel and sell it to any private-sector entity capable of paying for the supply, strictly in US dollars. This measure aims to ease pressure on oil stocks imported by state agencies for public use.
The companies, listed in a March 17 letter from Energy Ministry Secretary K.T.M. Udayanga Hemapala, have been permitted to sell fuel—including diesel, low-sulphur fuel, and high-sulphur fuel—to exporters, power generation companies, registered tourism service providers, licensed telecommunication providers, and other industries for a period of three months starting March 17. The inland transport sector, however, is not eligible for this special facility, according to the letter.
The authorised companies are Lanka OIC, Lanka Marine Services Pvt Ltd, Lanka Maritime Services Ltd, Lanka Bunkering Services Pvt Ltd, Moceti International Pvt Ltd, InterOcean Energy Pvt Ltd, McMarine Pvt Ltd, Sinopec Fuel Oil Lanka Pvt Ltd, Spence Sea Horse Marine Pvt Ltd, Serdaka Global Pvt Ltd, Hawks Colombo Pvt Ltd, and FitsOil Pvt Ltd.
Separately, a top economist, who requested anonymity, said the government currently has sufficient fuel buffers and foreign exchange reserves—which are at a record high of US$7 billion—for the coming weeks. On the hypothetical scenario of a six-month conflict, he remarked, “It’s anybody’s guess” regarding the economic impact.
He added that inflation has now fallen to single digits, and authorities are expecting a bumper Maha harvest by the end of this month, as sufficient fertiliser was distributed to farmers. He noted that authorities should continue passing on oil prices at prevailing market rates while cushioning the impact on vulnerable communities through subsidies.
The government’s decision to allow private-sector fuel sales, prompted by the fuel supply crisis caused by turbulence in West Asia, follows a March 11 submission from the Ceylon Chamber of Commerce. The Chamber proposed “allowing licensed local bunkering companies to procure fuel independently for supply to export-oriented industries and tourism operators, potentially on a foreign currency basis.” It noted that similar arrangements were successfully implemented during the recent economic crisis to sustain key sectors without straining domestic fuel supplies.
The Chamber also recommended adopting a strategic approach to fuel procurement, including exploring arrangements with a wider pool of international suppliers. Ensuring the availability of aviation fuel was highlighted as critical for sustaining inbound tourism.
The fuel is supplied through the Sri Lanka Ports Authority’s distribution facility at Bloemendhal Road, Colombo.
Meanwhile, offers continue to pour into the Ceylon Petroleum Corporation (CPC) from agents seeking to supply diesel, petrol, crude, and furnace oil. The CPC has stated that it will require a performance bond of US$1 million, and payments will only be made once the fuel arrives and passes testing in the Corporation’s accredited laboratory. CPC also confirmed that shipments are lined up for the next few weeks, though market analysts cautioned that it remains uncertain if all will arrive. “When it comes to the offers being made to CPC, there will only be a few genuine ones,” they warned, adding that prices are likely to rise further.
In other developments, Lanka Coal Company (Pvt) Ltd (LCC) awarded its emergency tender for 300,000 MT (five shipments) of coal to an Indian firm, Taranjot Resources (Pvt) Ltd, represented locally by Advantis, part of the Hayleys Group. Priced at US$142 per metric tonne, the total value of the emergency procurement is approximately US$9 million.
Separately, Trident Chemphar’s delayed shipments are expected to continue arriving over the coming weeks, despite Lakvijaya not generating optimum electricity from coal. Parliament’s Sectoral Oversight Committee (SOC) on Infrastructure and Strategic Development revealed on Thursday that bottom ash generated from burning the coal was significantly high.
The Public Utilities Commission of Sri Lanka (PUCSL) informed the SOC that during the night peak—when the coal power plant is most needed to supply cost-effective electricity to the national grid—Lakvijaya experienced shortages of 176 MW on Wednesday, 165 MW on Tuesday, and 148 MW on Monday.
LCC officials also reported that coal from Trident’s ninth shipment failed parameter tests conducted by Cotecna, the accredited laboratory chosen by Lakvijaya. This marks the second shipment that did not meet quality requirements, following the first failed shipment.
