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Loss of vital byproducts of refinery having devastating impact on other sectors: FSP



By Rathindra Kuruwita

Byproducts of the Sapugaskanda oil refinery such as furnace oil, jet fuel, kerosene and naphtha are vital for many Sri Lankan industries and its shutdown will have a devastating impact on various sectors, Frontline Socialist Party’s (FSP) Education Secretary, Pubudu Jayagoda says.

Jayagoda said Minister of Energy Udaya Gammanpila had stated that importing refined petrol and diesel was much more economical than purchasing crude oil.

“We do not have crude oil because the country doesn’t have dollars. The CPC floated over five tenders and there were no international sellers who wanted to supply us crude. In fact, sellers had not responded to the coal tenders floated by Sri Lanka and this might lead to a power shortage at the beginning of next year,” he said.

The Ceylon Electricity Board (CEB) has been able to generate a significant portion of electricity with hydropower because of heavy rains, he said adding that by January 2022, the people might have to experience several hours of power cuts, Jayagoda said.

“Sri Lanka spent a significant amount of money on oil imports. In 2019, when a barrel of crude oil was selling at around USD 69, we spent about USD 3.67 billion to import oil. In 2020, we spent about USD 2.32 billion because the price of a barrel of crude oil dropped to about USD 45. Right now the price of a barrel of crude oil is about USD 80, and we will spend about USD 4 billion this year. There are some who believe that the price of a barrel will go up to USD 120 by the end of 2022,” he said.

Jayagoda added that while Sri Lanka had no control over world crude oil prices, there were several ways that the CPC could improve the situation through long-term planning. In 2020, there was a significant drop in oil prices and Sri Lanka could have kept a buffer stock, he said. There are oil storage tanks in Muthurajawela and Trincomalee. However, instead of renovating the tanks in Trincomalee, the government is planning to sell them, he said.

“Fifteen oil tanks in Trincomalee have been given to Indian Oil Corporation (IOC) on lease. However, the agreement expires at the end of the year, and we can take them back. However, the government not only plans to give them back to the IOC, but they are planning to place over 70 tanks under a company that India has a majority stake in. An understanding was reached on this during the recent visit by the Indian Foreign Secretary. The ‘talks’ were so successful that the Indian delegation took some photos opposite the tanks,” Jayagoda said.

The FSP Education Secretary said that the Sapugaskanda Oil Refinery had not been expanded since its inception. Even without any funds to develop its infrastructure, the refinery played a significant role in supporting many industries, he said.

“So, around 60% are byproducts of refining are furnace oil, black oil, jet fuel, kerosene and naphtha. The CPC makes a lot of money by selling them. By mid-1990s, the CPC had been able to pay for its crude oil imports by selling the byproducts. However, successive governments have ruined this sources income. The fact that the CPC still makes money from them shows that there are cash cows,” he said.

Jayagoda said that ultimately the government would end up spending more dollars importing furnace oil, jet fuel, kerosene, and naphtha. This is akin to the disaster created by banning the import of urea, he said. Although the government saved some money by bringing a halt to import of urea, it spent a large amount of dollars importing compost, potassium, and nitrogen.

“A number of state and private companies depend on the byproducts of refining. Earlier the CEB bought black and furnace oil from the CPC. Now, it’s planning to import them. We will probably do the same with kerosene, naphtha and jet fuel. The question is whether we have dollars? If the CEB can’t purchase these products that will affect the production of 200 MWs of electricity,” Jagoda said.

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Countrywide power outage act of sabotage, claim TU, officials



Unions suspect sinister attempt to call in military

Engineers say technical fault caused power failure

CEBEU suspends work-to-rule protest

By Ifham Nizam

The government was trying to pin the blame for yesterday’s countrywide power outage on the Ceylon Electricity Board (CEB) trade unions in a bid to call in the military, Joint Trade Union Alliance Convener Ranjan Jayalal said yesterday.

Jayalal told The Island the government’s attempt would tarnish the image of the military and that of the country, but such intimidatory tactics would not deter the CEB unions from continuing with their action against the questionable agreement between the government and the US energy firm, New Fortress, which has been allowed to acquire a 40% stake in the Yugadanavi power plant. “The government is trying to derail our trade union action, scheduled for December 08. Definitely the power outage was an act of sabotage. Two units of the Norochcholai coal-fired power plant and the one at Sapugaskanda had failed,” he added, insisting that the trade unions had nothing do with the power outage. He said union activists had sprung into action to restore power despite their work-to-rule, for the sake of the country and its people.

A senior independent electrical engineer said the power failure was an act of sabotage or attempt at sabotage. “It could have been a rehearsal that misfired,” he added.

Electricity supply in several areas in Colombo and its suburbs were restored around 2.00 p.m. Subsequently, the power supply on Anuradhapura-Habarana, Laxapana-Athurugiriya and Kotmale-Biyagama transmission lines was restored. However, even at 5.30 p.m. most parts of the Gamapaha District experiencing power failures.

CEB General Manager, Eng. M R Ranatunga sand disruptions to the power supply could be considered sabotage. He said CEBEU activists had been dragging their feet on power restoration.

State Minister of National Security & Disaster Management Chamal Rajapaksa said necessary action would be taken against the CEB engineers if it was revealed that the power outage was an act of sabotage.

Major disruptions to the electricity supply were reported across the country around 11.30 a.m. yesterday owing to a breakdown in transmission lines.

The National Water Supply and Drainage Board (NWS&DB) said the water supply in several areas of Colombo and suburbs had been disrupted due to the breakdown in the power supply as the NWS&D is dependent on the national grid for pumping purposes.

The Ceylon Electricity Board Engineers Union (CEBEU) last night said it had received a favourable response from the government to its demands and therefore decided to suspend its work-to-rule campaign.

The Island learns that President’s Secretary Dr. P. B. Jayasundara will meet a CEBEU delegation, next week.

A senior electrical engineer expressed concern about CEB General Manager’s statement that the power outage was an act of sabotage by the engineers’ union. He denied as baseless the official’s claim.

CEBEU Secretary Dhammike Wimalarathne confirmed that his union had decided to suspend trade union action following an undertaking given by the government to have talks with them.

Meanwhile, CEBEU President Saumya Kumarawadu, addressing the media, yesterday, insisted that the power outage had been due to a technical problem.

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Chamal tells Parliament if power failure is due to sabotage, culprits will be dealt with severely



By Saman Indrajith

Minister of Irrigation and State Minister of Internal Security, Home Affairs and Disaster Management, Chamal Rajapaksa told Parliament yesterday that the government was investigating the causes of yesterday’s countrywide power outage and if it was due to sabotage those responsible would be severely dealt with.

Responding to a question by Anuradhapura District SJB MP Rohana Bandara Dissanayake during the third reading stage debate on Budget 2022 under the expenditure heads of the Ministry of Defence, the Minister said that the government would not tolerate sabotage.

MP Rohana Bandara Dissanayake said that while the national security was being debated in Parliament the entire country was experiencing a power outage which could be considered a serious threat to national security.

He said all reservoirs were brimful and there was sufficient water to generate hydro power.

Colombo District SJB MP Dr. Harsha de Silva said that the entire country was in dark and Parliament was sitting thanks to power supplied by generators.

Minister Rajapaksa said that the government had already called for an investigation and it would not hesitate to take necessary action on the findings of the probe.

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Committee on Public Finance meeting: one-third drop in next Yala harvest predicted



Members of the Committee on Public Finance recently recommended that if the import ban on rice, which was imposed last April, is to be lifted, it should be done only after a proper forecast of the coming Yala harvest.

The Chairman of the Committee on Finance Anura Priyadharshana Yapa pointed out that under the prevailing circumstances, the interest of the paddy farmers and consumers had to be taken into consideration.

In response to MP Yapa’s comment, the Imports and Exports Controller General revealed that, according to the available data, the expected Yala harvest is likely to be only 2/3 as compared to last year.

MP Nalin Fernando pointed out that if businessmen were allowed to import rice freely, the business community would be tempted to import more rice than necessary, driving the paddy prices down and affecting the farming community badly. Hence, the Ministry of Finance should intervene to prevent the local farmer from facing difficulties. MP Fernando also pointed out to the officials of the Ministry of Finance that it was important to make rice freely available at reasonable prices. Sri Lankans did not like rice imported from neighbouring countries, he said.

The Committee on Public Finance was urged to obtain approval for an Extraordinary Gazette Notification permitting the importation of Kekulu, Nadu, Samba and other types of rice as per the order of the Minister of Finance. MP Dr. Harsha de Silva said officials had to investigate the macro economic impact of such orders given without a proper procedural or logical assessment.

The committee members inquired from the officials of the Ministry of Finance who were present at the Committee meeting whether the 2021 Budget forecasts could be fulfilled. According to the statistics and data submitted by the officials of the Ministry of Finance, the committee observed that if only local funds were used to repay all debts, there would be an increase in interest rates in the near future and that would adversely affect the local private sector, (Dr.) Harsha de Silva said.

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