Sri Lanka still in talks with China to purchase fuel under G2G deal

Colombo, May 4 (Daily Mirror) - Sri Lanka is still having discussions with China to purchase fuel under a government to government agreement at market rates, Ports, Civil Aviation and Energy Minister Anura Karunathilake said yesterday.

The Minister told Daily Mirror that the government wishes to purchase at least one shipment of fuel from China under the current circumstances. He was responding to a question about energy security in the midst of the Middle East war.

Asked about planned purchases from Russia, he said that discussions are still ongoing. He said logistical arrangements for fuel supply from Russia are under consideration at the moment.

Discussions with Russia on fuel procurement are still underway, with several technical and procedural matters yet to be finalized. These include identifying the supplying entity and aligning transaction mechanisms with the procurement framework, according to him.

He explained that the Ceylon Petroleum Corporation (CPC) follows standard procedures such as upfront and down payments, while settlements are typically made only after shipments are tested upon arrival in the country.

Commenting on the latest fuel price hike, he said Sri Lanka’s fuel price cycle remains significantly lower compared to other countries in the region, even amid recent adjustments. He said that the price hike are warranted because of spikes in the global market, and the burden was not entirely transferred to consumers .

“The CPC absorbs a portion of the cost. For example, the price of auto diesel is Rs.392 a litre. According to the real cost, it should have been more than Rs.700 a litre. We make profits in certain months, and we use those gains to cushion consumers during periods when costs are high. That is our business model. We look at the annual performance,” he said.