News
CPC reveals its paltry fuel supplies
By Shiran Ranasinghe
The Ceylon Petroleum Corporation (CPC) said yesterday that it had only 6,000 tonnes of petrol and 12,000 tonnes of diesel. As a result, about 80% of the country’s gas stations remain closed.
However, a ship carrying 40,000 tonnes of diesel arrived yesterday. This is the last fuel shipment under the current Indian credit line. The government was finalising another Indian credit line to the tune of USD 500 million for fuel, the CPC said.
Sri Lanka needs about 3,500 tonnes of petrol, 6,000 tonnes of diesel and about 800 tonnes of kerosene, a day.
“We are trying to ensure that there is some level of petrol availability”, a CPC official said.
President of the All Ceylon Filling Station Owners Association, Shelton Fernando, said that the CPC now insisted that gas station owners make cash payments when orders were placed for fuel.
“A lot of gas station owners now do not even order fuel. We need to pay the CPC about five million rupees to order a bowser of petrol and a bowser of diesel. It wouldn’t be a problem if we get the bowser soon afterwards. There are delays in delivery of fuel.
Sapugaskanda Oil Refinery is now producing 825 tonnes of diesel, 320 tonnes of petrol and 620 tonnes of kerosene a day. If the refinery does not receive a new shipment of crude oil soon, it will have to close down again on 28 June, according to trade unionists.
The CPC official said that after 70 days of closure, the refinery had started producing furnace oil, tar, diesel, kerosene, naphtha and petrol, and the government had to do everything in its power to keep it functioning.
“What is being produced at Sapugaskanda now plays a vital role in fuel supply. However, the refinery is not working at full capacity and what it produces is nowhere near what the country requires”, he said.
The 90,000 tonnes of crude oil that the country has purchased was only adequate for 20-25 days, he said.
“If the government fails to get a new crude oil shipment, we will have to close down again. Even if the refinery operates at full capacity, it can process 5,500 tonnes of fuel a day. However, the government’s priority has not been to purchase crude, and therefore we are operating at half capacity,” he said.
The official said that the CPC had been able to provide some kerosene shipments after Sapugaskanda recommenced operations.
According to him the refinery needed a continuous supply of crude oil because the process of closing and restarting was bad for the facility and time-consuming.
In 2021, there were those who claimed that importing diesel and petrol directly was more profitable than operating a refinery, the official said. “However, we have seen the result of this hare-brained scheme. Kerosene queues are a permanent fixture of daily life. Many industries face furnace oil shortages and there is a shortage of tar.
Crude oil should be at the top of the government’s import priorities,” he said.
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Fuel crunch looms
Govt. tells fuel distributors to maintain stocks to ensure uninterrupted supplies
by Saman Indrajith and Norman Palihawadane
The government had instructed private fuel distributors to maintain minimum stocks and ensure uninterrupted supplies to the market, Energy Minister Anura Karunathilaka told Parliament yesterday (06).
Karunathilaka said the Ministry of Energy Secretary had notified the relevant companies of the requirement, following a reduction in supplies by some private distributors, amid higher international fuel prices.
The Minister said private companies had informed the government that they were facing losses because international prices had risen while fuel was being sold, locally, at prevailing prices. As a result, some companies had reduced the volumes released to the market.
The reduced supplies had increased the burden on the Ceylon Petroleum Corporation (CPC), whose share of the diesel market had risen from about 54% to 82%, the Minister said.
“The CPC currently holds an 82% share of the market,” he said, adding that it had increased its supplies, compared with February, to compensate for the reduction by private distributors.
Karunathilaka said the government could not, under the existing agreements with private companies, specify the quantities they should supply to individual filling stations. However, it could require them to maintain minimum stocks in the country.
The Minister said the Energy Ministry had already instructed companies that had failed to maintain the required stocks to take steps to prevent supply disruptions.
The Minister attributed the queues reported at some filling stations to reduced supplies from private distributors, as well as normal variations in fuel distribution. He also said demand for CPC fuel had increased because private companies generally did not provide fuel to dealers on credit, while the CPC offered a three-day credit facility.
“We expect that, as the Ceylon Petroleum Corporation takes on this additional burden, the problem will ease to some extent by Wednesday or Thursday,” Karunathilaka said.
He said instructions had also been issued to increase supplies to CPC filling stations. A special discussion on the issue is scheduled for today (07), with officials of the Energy Ministry and CPC expected to participate,
along with President Anura Kumara Dissanayake.
Meanwhile, Petroleum Dealers’ Association officials have called for an early solution to the supply issue. Association Chairman D.V. Shantha Silva said queues had been reported at many filling stations, mainly those operated by private distributors.
He said the situation was not due to an overall shortage of fuel, but was linked to reduced orders by Lanka IOC, Sinopec and R.M. Parks amid concerns over losses incurred on fuel sales.
The Ceylon Petroleum Private Tanker Owners Association has urged motorists to refrain from panic buying, saying there was no nationwide disruption to fuel supplies.
The government earlier increased fuel prices and introduced a per-litre diesel subsidy following concerns raised by distributors over rising international prices.
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