Sri Lanka’s biggest fuel supplier has suffered a massive profit collapse, revealing the hidden cost of falling oil prices, currency shifts, and shrinking consumer demand.
The Ceylon Petroleum Corporation has recorded a dramatic financial downturn, with its net profit plunging by 179 percent to Rs. 170 billion in the first six months of this year when compared to the same period in 2024. A report issued by the Ministry of Finance confirms that the corporation earned a net profit of Rs. 207 billion during the first half of last year, highlighting how sharply the performance of the state-owned oil giant has deteriorated within a single year. The decline in profitability has now raised fresh questions about the sustainability of Sri Lanka’s petroleum sector at a time when global markets continue to shift.
According to the report, the import cost of petroleum and crude oil products has fallen from US$ 1,235 million to US$ 1,040 million in the first six months of this year. This reduction has mainly resulted from a drop in fuel prices in the global oil market and the appreciation of the Sri Lankan rupee against the US dollar. While this decline in import expenditure would normally be expected to bring relief, it has instead contributed to a significant drop in turnover due to lower retail prices and reduced demand. The result is a sharp contraction in the corporation’s revenue stream.
The cost of sales, which stood at Rs. 46,770 million during the first half of last year, has dropped by 19.2 percent to Rs. 37,790 million this year. However, the reduction in cost has not been enough to compensate for the fall in overall sales. The turnover of Ceylon Petroleum Corporation has decreased by 19.3 percent to Rs. 43,950 million during the first six months of this year compared to the same period in 2024. This shrinking turnover is now being seen as the key factor behind the collapse in net profit, proving that lower fuel prices do not automatically mean financial relief for the petroleum sector.
The company’s declining performance reflects a deeper structural issue within Sri Lanka’s energy economy, where profit margins are tightly influenced by global oil market volatility, domestic pricing formulas, foreign exchange movements, and consumer purchasing power. Although the reduced import bill may appear positive on paper, it has translated into reduced earnings for Ceypetco, ultimately pushing the corporation into a serious profit slump. With the fuel sector already under pressure from competition, liberalisation policies, and fluctuating demand, industry analysts are warning that this sharp fall in profit may be a sign of tougher periods ahead unless strategic reforms are introduced.
