President Anura Kumara Dissanayake has identified national energy security as the next major challenge facing Sri Lanka, saying the country currently has fuel storage capacity equivalent to only around 23 to 25 days of consumption.
The President made the remarks yesterday (02) while attending the commencement of construction of the Ceylon Petroleum Corporation’s (CPC) Jet A-1 pipeline system and two new oil storage tank systems operated by the CPC and Ceylon Petroleum Storage Terminal Limited (CPSTL).
He said the Government had begun expanding pipeline infrastructure, reducing fuel unloading times and developing additional storage facilities to increase the country’s fuel reserves to at least 45 days.
According to the President, construction has commenced on a new tank system with a total capacity of 104,000 cubic metres.
President Dissanayake said the next challenge would be ensuring that energy is provided to consumers at the lowest possible cost. He added that the country’s economy had developed greater resilience against internally generated economic pressures, but remained exposed to external shocks, particularly those affecting global fuel prices.
He said the Government had also decided to reform the existing fuel subsidy mechanism, noting that the current system provides greater benefits to people who own larger vehicles because they consume more fuel.
Accordingly, he said discussions would be held next week with the Ministry of Digital Economy to develop a digital mechanism through which fuel subsidies could be targeted at sectors with genuine needs, including public transport, agricultural machinery, fishing vessels and lorries transporting vegetables.
Reflecting on the energy sector, President Dissanayake said the CPC, Ceylon Electricity Board and SriLankan Airlines had previously become a significant burden on the national economy.
He said the CPC had accumulated debt of around Rs. 840 billion, creating considerable pressure on the state banking system and contributing to calls for the privatisation of state-owned energy institutions.
However, the President said the Government believed the State should retain a leading role in the energy market because of the sector’s importance to the country’s economy and social life.
He stressed that continued State involvement could be justified only if state institutions operate efficiently and provide the services expected by the public.
President Dissanayake said the Government had worked to reduce political interference in state institutions and had stopped the practice of recruiting employees based on political requirements.
He said only essential personnel had been recruited for ongoing projects, citing four engineers and around 10 contractual employees recruited at the airport for the Jet A-1 fuel project.
The President said the CPC’s share of the diesel market had increased from around 58% previously to 74% last month, as private suppliers faced difficulties competing at the prices set by the CPC.
He said the CPC recorded a profit of Rs. 36 billion last year, while CPSTL record
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