Mar08. (LBO) — Sri Lanka’s fuel station operators are warning potential industry newcomers of the downside of petroleum retailing in an effort to halt further fragmentation of the industry. The Petroleum Dealers’ Association, which represent the over 600 fillings stations island-wide, said the business is becoming unviable as new filling stations spring up too close to existing outlets.
Only the existing business is being redistributed. Petroleum Dealers’ Association Administrative Secretary Asoka Mallawarachchi told LBO on Monday.
More than one filling station operates close to each other, sometimes even opposite each other and neither of them make enough money to meet their expenses.
Mallawarachchi said the current 1.5 percent to 1.7 percent commissions on petrol and diesel sales fell short of meeting rising electricity, water and wage bills.
The Association said that land owners who had committed their valuable road front properties to petroleum retailing, get a 1.7 percent margin on the retail price, which after paying all the bills left very little as rent for the land.
Mallawarachchi added that landowners opting to go into the business would