Connect with us

news

‘LIOC increases prices to cut down losses at CPC’s expense’

Published

on

Huge increase in sales volumes disastrous for Ceypetco – CPC chairman

By Shamindra Ferdinando

Ceylon Petroleum Corporation (CPC) Chairman Sumith Wijesinghe says Lanka IOC has increased its fuel prices by Rs. 5 a litre to curtail its losses by making its customers obtain fuel from Ceypetco fuel stations.

Wijesinghe said so when The Island sought an explanation as regards the mechanism in place to revise fuel prices and whether Lanka IOC required the government permission to do so. Wijesinghe emphasised that Lanka IOC move was calculated to discourage customers coming to its fuel stations thereby would sharply increase financial losses on the state enterprise as its fuel was highly subsidised to protect the local consumer.

“In other words, the surge in sales volumes will automatically increase losses. The same result can be achieved by increasing petrol and diesel by just two rupees, each,” Wijesinghe said.

Responding to another query, Wijesinghe pointed out that Lanka IOC clearly sought to cut down on their losses by forcing its regular customers to visit Ceypetco fuel stations. The outspoken official said that as their competitor is on record as having said that they suffered a loss of Rs. 20 and Rs.40 per ltr, on the sale of petrol and diesel, respectively, Lanka IOC strategy was clear.

Lanka IOC is a subsidiary of Indian Oil Corporation which comes under the purview of Ministry of Petroleum and Natural Gas, is the only private party that operates fuel stations here.

CPC Chief said as a result of increased volume of sales their stocks would be depleted much faster. Wijesinghe described the situation as ‘grave’ and quite a concern to cash-strapped loss making public sector enterprise.

According to him, the problem was much worse than the public realised. The Indian strategy would cause a catastrophic situation, Wijesinghe said.

Wijesinghe admitted that Lanka IOC didn’t require Energy Ministry consent to revise fuel prices. The enterprise that entered the Sri Lankan market during Ranil Wickremesinghe’s premiership in 2003 is the eighth largest listed company here.

The official stressed that urgent revision of fuel prices was a dire necessity as the overall financial situation remained precarious. Ceypetco’s network of fuel stations is much larger than Lanka IOC’s.

Lanka IOC in a statement issued Thursday night said that the selling price of petrol and diesel here remained significantly low as compared to the prices prevailing in the neighboring countries. “The prices of petrol and diesel need to be in line with the prices prevailing in the international market,” the company said in a statement e-mailed to The Island.

Lanka IOC refrained from revising the prices of Lanka Super Diesel and LP 95. The previous price revision took place on June 12.

Asked whether Ceypetco would match the Lanka IOC’s price increase immediately to counter the competitor’s strategy, CPC Chairman said that the issue at hand required a thorough examination of the full picture as they couldn’t contain the rapid deterioration of the finances unless a substantial increase was implemented.

Claiming the mounting losses were unbearable, Managing Director LIOC Manoj Gupta said that the company had increased the prices to the barest minimum. Responding to The Island queries, Gupta said that Lanka IOC didn’t require GoSL approval to revise fuel prices. According to the Indian official, Lanka IOC had been empowered by ‘virtues of previously signed agreements with GOSL to take independent commercial decisions.“

As at Oct. 21 the international price of Gasoil 500ppm was at $ 95.62/barrel and Gasoline92 $ 99.37/barrel.

The last price revision took place on June 12, 2021. However, since then the Brent crude oil prices have increased from $72/barrel to $86/barrel in the international market.

Energy Minister Udaya Gammanpila on Oct. 15 revealed that when raised the possibility of Treasury assistance to the CPC with Finance Minister Basil Rajapaksa, he was told in no uncertain terms the Finance Ministry was not in a position to do so.

In the wake of simmering controversy over the fuel price hike announced by Minister Gammanpila on June 12 with General Secretary of the SLPP attorney-at-law Sagara Kariyawasam demanding the minister’s resignation, the latter declared that the revision of fuel prices was the prerogative of the Finance Minister.

Attorney-at-law Gammanpila explained that in his capacity as the Energy Minister, he only made the announcement of a decision taken at a meeting attended by both President Gotabaya Rajapaksa and Premier Mahinda Rajapaksa.

Asked by The Island yesterday (22) afternoon whether the Ceypetco would match Lanka IOC price hike immediately, Minister Gammanpila said ‘No.’

In terms of the 2003 agreement with the UNP government, Lanka IOC has the strategically located China Bay oil tank farm, the largest such facility situated between the Middle East and Singapore. The tank farm, formerly owned and operated by CPC, has 99 tanks, each with a capacity of 12,000 litres. Of them, only 15 of these tanks are operational at the moment.

Commenting on the ongoing talks with about half a dozen countries to ensure uninterrupted fuel supplies, the Pivithuru Hela Urumaya (PHU) leader Gammanpila said that the cabinet of ministers recently approved a proposal to obtain USD 3.6 billion loan from Oman to repay in 20 years with a five-year grace period. According to him, the Omani offer had been undoubtedly the best and the government was going ahead with it. The offer now before the cabinet of ministers would give the government an opportunity to use USD 500 mn overdraft to order refined products from India.

Minister Gammanpila said that there had been other offers from China, UAE and Singapore though at the moment they were committed to Omani and Indian proposals.

Asked to explain the Indian offer, Minister Gammanpila said that USD 500 overdraft could be obtained with 4 percent interest payable in one year.

“Once settled, we’ll be eligible for USD 500 mn overdraft again.”



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

news

GL explains to UN Special Rapporteur Lanka’s progress related to labour welfare

Published

on

Foreign Minister Prof. G.L. Peiris has explained to UN Special Rapporteur on Contemporary Forms of Slavery, including its causes and consequences, Tomoya Obokata, Sri Lanka’s progress related to labour welfare and the constructive steps taken by the government to eradicate child labour.

The Minister also elaborated on steps taken to bring our labour laws in line with international standards in a number of areas, including child labour, migrant workers and debt bondage. The Special Rapporteur commended Sri Lanka on the progress made with regard to making Sri Lanka a ‘child labour free zone’.

The UN official called on Prof. Peiris on Friday, 26 November, at the Foreign Ministry.

The mandate of the Special Rapporteur includes but is not limited to issues such as: traditional slavery, debt bondage, forced labour, children in slavery and slavery-like conditions, sexual slavery, forced and early marriages as well as issues faced by migrant workers and foreign labour.

The Foreign Minister outlined that Sri Lanka was conscious of protecting vulnerable labour groups and emphasized that Sri Lanka will continue to cooperate with the United Nations system. He stated that visits by Special Procedures Mandate Holders have been helpful in enhancing understanding of the specificities of Sri Lanka’s experiences in related fields as well as in improving domestic processes to be in line with our international commitments.

Continue Reading

news

More gas explosions

Published

on

Two women injured

By Rathindra Kuruwita

There were 11 new explosions related to domestic gas cylinders in the 24 hours that ended at 12 noon yesterday. Among the areas these explosions were reported are Agama, Karana, Hungnam, Walasmulla, Kundasale, Katugastota, Dimbula and Giriulla.

Two women have been injured in these latest explosions. In some instances, the gas cooker wasn’t even on when the explosions happened.

Meanwhile, Litro has introduced the hotline, 1311, for the public to make any complaints with regard to their gas cylinders. Once a complaint is received, a team of technicians will arrive and check the cylinder, the company said.

Litro also urged the public not to try any experiments to see if the cylinders are safe.

Continue Reading

news

Countries tighten travel rules to slow Omicron spread

Published

on

Saudi Arabia, Nigeria, Norway, Ghana confirm first cases of the new Omicron COVID-19 variant as countries tighten travel rules.

The United States, Japan and Malaysia have announced tighter travel restrictions in an attempt to slow the spread of the new Omicron coronavirus variant as more countries confirmed their first cases.

Japan and Hong Kong said on Wednesday they would expand travel curbs, and Malaysia temporarily banned travellers from countries deemed at risk, news agencies reported.

Hong Kong added Japan, Portugal and Sweden to its travel restrictions while Uzbekistan said it would suspend flights with Hong Kong as well as South Africa. Japan, which had already barred all new foreign entrants, reported its second case of the new variant and said it would expand its entry ban to foreigners with resident status from 10 African countries.

Malaysia temporarily barred travellers from eight African countries and said Britain and the Netherlands could join the list.

In North America, air travellers to the US were set to face tougher COVID-19 testing rules.

The Centers for Disease Control and Prevention (CDC) said late on Tuesday that the US would require all air travellers entering the country to show a negative COVID-19 test performed within one day of departure.

Currently, vaccinated international travellers can present a negative result obtained within three days from their point of departure. The new one-day testing requirement would apply to US citizens as well as foreign nationals.

Global spread

Saudi Arabia’s health ministry said it recorded the Gulf’s first confirmed case of the Omicron variant in a citizen returning from North Africa.

Nigeria said it had confirmed two cases of the Omicron variant among travellers who had arrived from South Africa in the past week. Ghana and Norway also reported their first cases of the new variant on Wednesday.

Brazilian health regulator Anvisa said late on Tuesday that two Brazilians had tested positive for the Omicron strain, the first reported cases in Latin America. A traveller arriving in Sao Paulo from South Africa and his wife, who had not travelled, had tested positive.

Germany, which is battling a surge in COVID-19 infections and deaths, reported that four fully vaccinated people had tested positive for Omicron in the south of the country but had moderate symptoms.

It also reported the highest number of deaths from coronavirus since mid-February on Wednesday, as hospitals warned that the country could have 6,000 people in intensive care by Christmas, above the peak of last winter.

Other countries braced for more cases: Australia said at least two people visited several locations in Sydney while likely infectious and Denmark said an infected person had taken part in a large concert.

The World Health Organization (WHO) said “blanket travel bans will not prevent the international spread, and they place a heavy burden on lives and livelihoods”, while advising those unwell, vulnerable or 60 years or over and unvaccinated to postpone travel.

Global health officials have offered reassurances and reiterated calls for people to get vaccinated.

BioNTech’s CEO said the vaccine it makes in a partnership with Pfizer would likely offer strong protection against severe disease from Omicron.

European Medicines Agency Executive Director Emer Cooke earlier said that laboratory analyses should indicate over the next couple of weeks whether the blood of vaccinated people has sufficient antibodies to neutralise the new variant.

The European Union brought forward the start of its vaccine distribution programme for five-to-11-year-old children by a week to December 13.

Britain, the US and European countries have expanded their booster programmes in response to the new variant.

First reported in South Africa a week ago, Omicron has highlighted the disparity between substantial vaccination pushes in rich nations and sparse inoculation in the developing world.

Continue Reading

Trending