Businessmen operating fuel stations under the Ceylon Petroleum Corporation (CPC) are reporting severe financial distress following the corporation’s decision to cut the 3 percent commission that has been paid to station operators since 2016. The commission, also referred to as an operating dividend, has been reduced to between 1.3 and 1.6 percent, a move that distributors say makes it impossible to sustain the cost of running fuel stations.
Several distributors have already decided to exit the business, citing the unfeasibility of operating under the reduced commission. The Indian Oil Company (IOC), which also adopted the cut, has responded by reinstating the 3 percent dividend from the 1st of this month following pressure from affected businessmen. Meanwhile, other oil companies, including Sinopec and R.M. Park, continue to provide the full 3 percent commission to their agents, highlighting CPC’s decision as particularly arbitrary.
The Oil Distributors Association has warned that approximately 836 CPC fuel station owners are now facing a financial crisis. The association expressed astonishment at CPC’s unilateral decision, emphasizing that it threatens the livelihoods of Sri Lankan businessmen who have long relied on these commissions to maintain operations. Distributors argue that unless the commission structure is restored, more operators may be forced to leave the industry, further destabilizing the nation’s fuel distribution network.
