Sri Lanka’s state fuel giant is spiralling into a fresh financial crunch as trade debt soars, profits shrink and warning signs emerge across the energy sector.
The Budget Economic and Financial Situation Report for 2026 has revealed that the trade debt of the Ceylon Petroleum Corporation increased substantially, pointing to new concerns over financial stability for the state-owned fuel supplier. The total outstanding trade debt, which amounted to 9.9 billion rupees at the end of 2024, rose by 38% to 13.7 billion rupees as of August 2025.
According to the report, the major reason for such a sudden increase is the extensive credit facilities for fuel dealers since April 2025. The requirement to calculate monthly utility charges from 2024 to 2025 in fulfillment of a court order has further increased the financial burden of the corporation. Officials say additional credit facilities provided to the West Coast Power Plant have also contributed to an increase in the trade debt.
In spite of all the efforts to stabilize operations, Ceylon Petroleum Corporation has recorded a steep decline in profitability during the first eight months of 2025. The net profit of the Corporation, which was 27.4 billion rupees during the corresponding period in 2024, has slipped by 19 percent to 22.1 billion rupees this year, reflecting the integrated impact of increasing credit exposure, delayed adjustments in utility costs, and the overall financial stress on the energy sector.
The report warns that, without corrective measures being taken, the corporation might experience further operational risks linked to liquidity and credit management. Stakeholders expect the government and energy regulators to take immediate steps to address the worsening financial situation.
