• Some consumers pay Rs. 1,000 for a litre of diesel
• Corruption, favouritism, lack of planning affecting distribution: Palitha
• Says transparent mechanism needed to distribute fuel effectively and fairly
• Report irregularities to Police, looking into incidents: Pathirana

By Maheesha Mudugamuwa Concerns about fuel scarcity and what the future may hold have seen many hoard petroleum products, giving rise to a lucrative black market, while sustaining adequate supply seems to remain out of the Government’s grasp. The petroleum racket keeps growing even as the country’s fuel stocks reached their lowest last week, forcing it to limit State sector operations, as the Government was unable to bring down sufficient stocks on time. Several consumers who had bought fuel from the black market told The Sunday Morning that one litre of either petrol or diesel was being sold at around Rs. 800 and the prices continued to increase daily. Lanka auto diesel, which is retailed at Rs. 400 per litre, can be found on the black market for over Rs. 1,000. They stressed that even though the fuel stocks had been limited at legally approved selling points, there were adequate stocks available with some of the key players in this illegal black market. A number of fuel stations around the country, along with some of their employees, are also involved in the racket, consumers allege. “Last week I had to rush for a family matter from Colombo to Haputale. Unfortunately, I didn’t have enough petrol as I couldn’t go to a queue, being busy with work. Then I had to ask one of the three-wheeler guys near my apartment and he directed me to one such black market dealer. I had to spend Rs. 750 per litre of petrol. He said he was giving me the additional stocks that he kept in case of an emergency, but later on I got to know that he was one such dealer as many of my friends too had reached out to him during the last several months,” a Colombo-based businessman who wished to remain anonymous told The Sunday Morning. A similar story was shared by another resident from Piliyandala where he had purchased two litres to go in search of fuel stations with stocks last week, spending Rs. 800 per litre. “These racketeers are taking advantage of the current situation. All of this is because of the Government’s inability to provide us an uninterrupted supply,” he said, while blaming the Government for putting people in such a situation even when they had duly paid each and every tax owed to the Government. “If this continues, I’m pretty sure that dealers will suck more blood and squeeze the last rupee from the poor citizens who are in desperate situations. I don’t like to spend Rs. 800 for a litre of petrol. Why should I? But the situation has left me with no other option,” he stressed.  Fuel mafia Some fuel station owners have been accused of being a part of an alleged ‘fuel mafia,’ contributing to long queues and shortages. As a result of this alleged mafia, it is said that fuel demand has also increased. As per Ceylon Petroleum Corporation (CPC) statistics, during the period of nine years from 2011-2019, the daily average demand for diesel, petrol, aviation fuel, and kerosene was approximately 7,131 kl, 4,137 kl, 1,394 kl, and 551 kl respectively. This is now said to have increased dramatically and the authorities suspect that it is mainly due to the illegal hoarding of fuel stocks. According to the Central Bank of Sri Lanka (CBSL) Annual Report of 2019, the annual expenditure on importation of crude oil and refined products amounted to Rs. 657 billion and represented 18% of the total import expenditure of the country. As the low-scale black market is operating at ground levels, energy trade unions have alleged that large-scale rackets are being conducted with the involvement of some key Government politicians. Speaking to The Sunday Morning, Energy Trade Union (ETU) Convener Ananda Palitha stressed that a number of irregularities were taking place during the dispatching of fuel from the storage locations. “We heard that the distribution is currently being affected due to favouritism. A number of fuel stations are owned directly or indirectly by politicians and, when distributing, these fuel stations have been given priority,” he stressed, adding that these irregularities had affected the smooth distribution of fuel around the country. He went on to say that some fuel stations had not received fuel for many days while others received stocks daily. Palitha also alleged that large stocks of fuel were being hoarded by influential persons, contrary to the prevailing law that governs fuel distribution. There had been incidents where fuel bowsers had been sent to some locations that did not have sufficient facilities for storage, while incidents had also been reported where bowsers had been sent to some key businessmen while ordinary citizens had been waiting in queues, Palitha revealed. He noted that the irregularities had occurred as the CPC had no proper plan for distribution of fuel. Highlighting recent incidents where some people had obtained fuel from CPC bowsers, Palitha said no action had been taken by the CPC to date to punish those who were involved in such rackets. Market players The CPC was established by the Ceylon Petroleum Corporation Act No. 28 of 1961 to operate the petroleum business in Sri Lanka through importation, refining, distribution, and selling of crude oil and finished petroleum products. Until 2003, the CPC had met the petroleum requirement of the whole country. In 2003, in line with a decision by the Government, Lanka Indian Oil Company (LIOC) had joined as a private party to meet the country’s fuel requirement. Accordingly, Ceylon Petroleum Storage Terminals Ltd. (CPSTL) had been established for operating the storage and distribution of petroleum, implemented under the co-ownership of CPC and LIOC. Two-thirds of CPSTL is owned by CPC and one-third is owned by LIOC. Islandwide fuel distribution is implemented by CPSTL through the Kolonnawa Installation and Muthurajawela Terminal. Moreover, outside the CPSTL, CPC issues fuel through the Sapugaskanda New Terminal and LIOC issues fuel through the oil tank complex in Trincomalee separately. Petrol and diesel are mainly stored in the Muthurajawela Terminal, along with other products on a very small scale. All types of products are stored in the Kolonnawa Terminal. Petrol, diesel, kerosene, aviation fuel, and other products are transported by bowsers and railway wagons from the Kolonnawa Terminal to the depots established islandwide. The bowsers owned by the CPSTL and bowsers obtained on hire basis are used for transportation. Transparency needed According to energy trade unions, the situation can be controlled if CPC and CPSTL were to install a transparent mechanism to distribute fuel through fuel bowsers. “Earlier there was an app where we could see the available stocks and stations, but now it is not active. The Government had disabled it. This undoubtedly facilitates the mafia as the app provided information to the public,” Palitha stressed. Meanwhile, when The Sunday Morning contacted Power and Energy Ministry Secretary M.P.D.U.K. Mapa Pathirana, he requested the public to inform the Police if they suspected any fraudulent acts. He added the CPC was currently taking measures to avoid irregularities taking place at ground level. When queried further on the irregularities, Pathirana stressed that it was the CPC that should look into such matters. Attempts to contact the CPC and CPSTL management were futile.  Meanwhile, the Power and Energy Minister on Saturday (25) said that the CPC had informed him that the suppliers that had confirmed petrol, diesel and crude oil shipments to arrive earlier this week and next week had communicated the inability to fulfil the deliveries on time for banking and logistic reasons. “Until the next shipments are at port and unloaded, public transport, power generation, and industries will be given priority. Limited stocks of diesel and petrol will be distributed to limited stations throughout next week and request the public not to line up for fuel. At the moment CPC is not able to confirm the arrival dates of the shipments with the new developments. Refinery operations will be temporarily closed until the next crude shipment. We are working with all new and existing suppliers. I apologise for the delay and inconvenience,” he stated on Twitter.