Fuel market faces fresh pressure as Asian prices rise

Sri Lanka's fuel market is being pushed by the ongoing conflict in the West Asian region and disruptions to key oil-shipping routes, according to a top Ceylon Petroleum Corporation (CPC) official. The official stated that the sharp rise in international oil prices is directly linked to the conflict and disruptions in energy infrastructure and shipping routes in the region.

Sri Lanka's exposure to these international price shocks depends on the timing of fuel purchases, as petroleum shipments are ordered well before their arrival in the country, and the final landed cost is determined when the cargo is delivered. The CPC is working to alleviate the impact on consumers while ensuring a steady supply of fuel.

Meanwhile, Brent crude remains above USD 100 a barrel, despite a recent drop following Saudi Arabia's efforts to maintain exports through alternative routes. The country's petroleum import bill, foreign-exchange requirements, and inflation are all at risk due to the higher international crude and refined-product prices. Sri Lanka is not alone in facing this issue, as several neighboring Asian countries have also increased fuel prices recently.

The government is exploring various options to protect consumers, including fuel subsidies, price limits, and adjustments to retail prices. The energy market remains highly volatile, with the Strait of Hormuz still severely disrupted, and the wider conflict continuing to pose risks to crude and refined-product supplies.