Oil market alarming for Sri Lanka, CPC seeks meeting with President

Colombo, July 27 (Daily Mirror) - With the global oil market remaining volatile due to tensions in the Middle East, the Ceylon Petroleum Corporation (CPC) has sought an urgent meeting with President Anura Kumara Dissanayake to discuss fresh measures to mitigate the impact, an official said.

Asserting that the global oil market situation is alarming for Sri Lanka, CPC Chairman D.J. Rajakaruna told the Daily Mirror that the public should be aware of the worsening trend.

He said diesel prices had surged by 45 per cent and petrol prices by 30 per cent compared with the rates that prevailed at the beginning of this month. Crude oil prices have also increased sharply since then, making the situation increasingly difficult for Sri Lanka, a country that is entirely dependent on fuel imports.

"We have sought a meeting with the President to discuss what needs to be done. Consumption reduction is needed," he said.

He said other retail fuel distributors in the domestic market had also cited difficulties in selling fuel at the current prices.

The price of physical crude oil cargoes in the Middle East, Europe and Africa jumped this week to two-month highs, with some nearing US$110 a barrel, as supply disruptions linked to the conflicts involving Iran and Ukraine left buyers scrambling to secure prompt supplies from other sources, Reuters reported.

Mr. Rajakaruna said the dry spell triggered by El Niño weather conditions had reduced hydropower generation capacity, placing further strain on the demand for fuel used in power generation.

"This is yet another serious challenge for us. We are now compelled to release increasing quantities of fuel from our stocks to generate power in the absence of adequate hydropower generation," he said.