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Kanchana admits consumers charged Rs. 50 per litre of fuel to settle USD 700 mn Indian loan

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… USD 5 mn paid to Iran a month

By Shamindra Ferdinando

Power and Energy Minister Kanchana Wijesekera has confirmed that consumers of petrol and diesel have been made to pay Rs. 50 to Rs. 55 per litre since the middle of last year to settle what the Ceylon Petroleum Corporation (CPC) owed its creditors.

Minister Wijesekera said so when Chamuditha Samarawickrema raised the issue on ‘Salakuna’ live political programme on Hiru TV recently.

SJB trade unionist Ananda Palitha disclosed the CPC move in an interview with The Island recently. The former UNP trade union leader said that a litre of petrol 92 cost Rs. 366, Octane 95 Rs. 464, Auto Diesel Rs. 358 and Super Diesel Rs. 475 because the CPC passed its debt on to consumers. A litre of Kerosene is sold at Rs. 236.

Wijesekera said: “CPC owed USD 730 to suppliers. In addition, the CPC owed the two State Banks – Bank of Ceylon and People’s Bank Rs 199 bn. Under the Indian credit line, the CPC procured petroleum products to the tune of USD 700 mn from April to August 2022. We also owe Iran USD 240 mn as payments couldn’t be made due to international sanctions that had been in place at that time.”

With a view to easing pressure on the two State Banks, the CPC settled the entire amount owed to them, Minister Wijesekera said. The improvement of the financial situation due to the revision of fuel pricing formula enabled the CPC to repay Rs 150 bn out of Rs 199 bn. “We have settled the total amount owed to the People’s Bank and the Bank of Ceylon debt was brought down to approximately Rs 50 bn.”

Minister Wijesekera said that the CPC faced a major crisis as supplies had been disrupted due to their failure to pay suppliers. Of USD 730 mn debt, the CPC owed China about USD 400 mn, Minister Wijesekera said, disclosing China had initiated legal action against Sri Lanka in this regard. On a priority basis the CPC had settled the entire USD 730 mn owed to suppliers.

Commenting on the Indian credit-line used by the CPC to the tune of USD 700 mn, Minister Wijesekera said that the Treasury had undertaken to settle that amount. The minister contradicted Ananda Palitha’s claim that the Treasury had taken over the entire CPC debt amounting to USD 3 bn. According to him, consumers were charged Rs 50 to Rs 55 as excise duty per a litre of petrol and diesel to cover USD 700 mn Indian loan.

Referring to the long overdue payment for Iranian crude, Minister Wijesekera said it was being repaid in monthly installments of USD 5 mn each.

Responding to another query, Minister Wijesekera said that the CPC had been in debt to the tune of Rs 2 trillion. The Treasury had taken the bigger share of that amount including the USD 700 mn Indian credit line, he said. Asked whether Sinopec and Lanka IOC benefited from the Rs 50 to Rs 55 excise duty, Minister Wijesekera declared that money ended up with the Treasury.

Minister Wijesekera said that although diesel was subjected to tax it was not used to generate electricity now. Furnace oil and naphtha weren’t subject to taxes, he said, adding that the CPC didn’t make profits by supplying furnace oil to the CEB.

Asked why Sri Lanka didn’t obtain fuel supplies from Russia but almost entirely depend on Singapore based trading firms, Minister Wijesekera said that there were about 10 suppliers and the CPC followed tender procedures.

Minister Wijesekesa said that after Sri Lanka had finalized agreement with the IMF in respect of the USD 2.9 bn loan package, the CPC didn’t accept unsolicited bids.



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President calls on Atamasthanadipathi Thero

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President Anura Kumara Dissanayake called on the Atamasthanadhipathi, Chief Sanghanayake of Nuwara Kalaviya, Most Venerable Pallegama Hemarathana Nayake Thero, this morning (07) for a brief discussion.

During the meeting, the President apprised the Thero of the measures being implemented by the government to provide relief to the affected people and to restore normalcy in their daily lives.

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US deploys two C-130J Super Hercules aircraft and personnel to assist in relief measures

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The United States has extended humanitarian assistance to Sri Lanka to support nationwide relief efforts in the aftermath of Cyclone Ditwah, which caused severe damage across multiple regions of Sri Lanka.

The latest round of assistance, included the deployment of two C-130J Super Hercules aircraft, equipment and US Air Force personnel. The US contingent will provide vital transportation and logistics support in areas identified by the Disaster Management Centre.

A formal handover took place this afternoon (07) at the Bandaranaike International Airport (BIA) with the support officially received on behalf of the Sri Lankan government by Minister of Science and Technology Prof. Chrishantha Abeysena, Deputy Minister of Ports and Civil Aviation, Janitha Ruwan Kodithuwakku and Deputy Minister of Defence Maj. Gen. Aruna Jayasekara (Rtd).

The assistance was presented by the United States through Julie Chung, Ambassador of the United States to Sri Lanka, and Lt. Col. Van Pinxteren of the United States Air Force.

As part of the support package, the United States contingent will provide logistics capacities needed to transport humanitarian supplies to affected communities in the Northern, Eastern and Central regions.

Sri Lankan officials expressed their gratitude for the timely support, which will bolster ongoing national efforts to reach displaced families and restore essential services in cyclone-affected areas.

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Government prepares Anuradhapura farmers for Maha Season

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President Anura Kumara Dissanayake instructed officials to prepare the farmers in the Anuradhapura District whose paddy cultivation was destroyed due to floods to re-cultivate during the upcoming Maha season.

Highlighting the need for all relevant institutions to work in proper coordination, treating this as a national necessity, the President instructed the authorities to provide compensation to farmers without delay and to ensure temporary irrigation water supply through provisional repairs.

The President further noted that the government is providing the highest amount of compensation in the country’s history for crop damages, with the expectation that cultivation activities will be commenced again promptly.

President Anura Kumara Dissanayake gave these instructions this morning (07) while attending a special coordination committee meeting at the Anuradhapura District Secretariat to review the programme being implemented to restore normalcy to the lives of people affected by the disaster situation and to rehabilitate damaged infrastructure in the district.

The President instructed officials to present, before this Friday, a report detailing the number of farmers who were completely affected, the extent of damaged farmland and the required financial allocations. He emphasised that compensation must be granted only to those who are genuinely entitled and that no one should receive it unjustly.

The President stated that the government is committed to providing compensation to the farming community and directed officials to foster confidence among farmers so that they will be encouraged to resume cultivation.

The President also inquired, separately, from the relevant institutions about the measures taken for the development of the district’s infrastructure including highways, irrigation and communication networks.

The President examined the programme for reopening obstructed roads and instructed that temporary repairs be expedited to meet the public’s transportation needs until permanent road development plans are implemented.

Officials of the Ceylon Electricity Board informed the meeting that 473 out of the 580 electricity transformers damaged due to the disaster have already been restored and that full electricity supply to the district could be achieved by tomorrow.

They further stated that 49,000 water connections had been affected, of which about 99% have now been restored, while water is being supplied by bowsers to the remaining areas. They noted that total restoration of water supply is expected within the next two days. Damaged community water projects are also being restored.

Well-cleaning activities are currently being carried out with the support of the Navy and the President instructed officials to complete these tasks swiftly through community participation coordinated by Divisional Secretariats.

Discussions were also held regarding the provision of compensation for crops such as Maize, restarting cultivation, restoring the livelihoods of those engaged in animal husbandry, normalising health services and rehabilitating religious sites including damaged temples.

The floods have caused total damage to 228 houses in the district. The President instructed officials to gather accurate information on whether affected families should be resettled on the same land or relocated elsewhere and to begin identifying suitable land for resettlement.

Officials reported that all schools in the district could reopen by 16 December. The President instructed that the Rs. 15,000 allowance promised by the Treasury for schoolchildren affected by the disaster be fully distributed before 31 December and that the list of beneficiaries be prepared without delay.

The President also expressed his gratitude to government officials, the Police and the Tri-Forces for their service in providing relief to the public and restoring infrastructure.

The meeting was attended by Co-Chair of the Anuradhapura District Development Committee, Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe, Minister of Housing, Construction and Water Supply Susil Ranasinghe , Anuradhapura District MPs Susantha Kumara Navaratna and Sena Nanayakkara, North Central Province Governor Wasantha Jinadasa, Chief Secretary J.M.R.P. Jayasinghe, representatives of local authorities; Secretary to the Treasury Dr Harshana Suriyapperuma, Anuradhapura District Secretary K.G.R. Wimalasuriya, ministry secretaries and other government officials.

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