Govt. to pay Rs. 70 a litre to diesel retailers

Friday, 2 October 2026 00:20 - - {{hitsCtrl.values.hits}}

Energy Minister Anura Karunathilaka

Energy Minister says retailers report losses of Rs. 120 to Rs. 247 per litre; subsidy covers only part, leaving companies to absorb the rest
Some retailers already restricting diesel supplies, shifting pressure onto CPC
Minister confident CPC will avoid overall loss for the year with revenue from petrol, aviation fuel and refinery operations

The Government will pay licensed fuel retailers Rs. 70 for every litre of diesel sold under a Rs. 41 billion subsidy approved by the Cabinet, Energy Minister Anura Karunathilaka said yesterday. The subsidy is meant to cushion consumers and fuel companies from surging global oil prices.

The subsidy will be released over three months, with Rs. 15 billion allocated for October, Rs. 13.5 billion for November and Rs. 12.5 billion for December. Payments to each company will be based on the volume of diesel it sells in the respective month.

The measure is intended to prevent the full increase in international fuel prices from being passed on to consumers, the Minister said.

Fuel companies have reported varying losses under the current pricing structure, Karunathilaka said. Losses cited by individual companies were Rs. 120, Rs. 135, Rs. 192 and Rs. 247 per litre of diesel.

Karunathilaka acknowledged that the subsidy would not fully cover these losses, leaving retailers to absorb part of the increased costs. At Rs. 70 per litre, the subsidy offsets between 28% and 58% of the losses reported. He said the measure aimed to ease pressure on the fuel market and prevent a sharp price shock for consumers.

Some retailers have begun restricting diesel supplies, placing additional pressure on the Ceylon Petroleum Corporation (CPC), the Minister said.

Despite the added burden, Karunathilaka said he was confident the CPC would not record an overall loss for the year. Revenue from its wider operations, including sales of petrol, diesel and aviation fuel as well as refinery operations, would help offset the additional costs, he said.