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by Maheesha Mudugamuwa
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The Ceylon Petroleum Corporation (CPC) continued to incur heavy losses as petrol, diesel and kerosene were being subjected to higher taxes by the government which had no proper fuel pricing formula, CPC UNP Trade Unionist claimed yesterday.
Convenor of CPC branch of the Jathika Sevaka Sangamaya (JSS) Ananda Palitha told The Island that CPC had suffered a loss of Rs, 13 bn during the last 11 months.
According to Palitha, the CPC sold a litre of petrol at Rs. 117, while it costs the corporation Rs. 113.39 inclusive of a tax of around Rs. 65 per litre from both 92 octane petrol and 95 octane petrol. Diesel cost the corporation Rs. 79.88 per litre inclusive of a tax of around Rs. 15 per litre while the selling price was Rs. 95 a litre. The tax on kerosene was Rs. 49.
Palitha said successive governments had imposed taxes on fuel haphazardly to pay their debts and the CPC and the public had been the victims of that ill-conceived policy.
In the world market a barrel of crude oil cost USD 27 and a barrel of refined oil USD 50. But, the government had not to yet reduced the local selling price of petrol. The government should not make the most of the world price decreases to collect more tax revenue from fuel sales and recoup past losses, the JSS convenor said.
Meanwhile, Petroleum Resources Development Minister Chandima Weerakkody recently said that plans were afoot to bring in a new fuel pricing formula where prices would adjust in line with world market trends.
Palitha noted it was not enough to make a new fuel pricing formula; the government had to ensure that each and every sector reduced the prices of goods and services so that the public would gain.
The JSS CPC branch chief urged the government to resume the CPC’s bunkering operations which had been stopped in 1989.
In 2007, the bunkering operations had resumed only to be abandoned again due to launching issues, he said.
Palitha assured that the CPC had 40 years of bunkering experience and, therefore, the corporation could resume bunkering within one month.
At present the Indian Oil Company (IOC) was leading the bunkering operations in Sri Lanka with seven other private companies. The IOC entered local bunkering operations in 2007, the JSS Chief said.
Commenting on Minister Weerakkody’s recent meeting with Iranian Ambassador, Palitha claimed that there had been no arrangement to restore the Sapugaskanda refinery soon.
Though the Iranian Ambassador had discussed about renovation, it wouldn’t start immediately due to Iran’s economic crisis, Palitha noted.
Referring to the proposed Hambantota refinery, he said that it had been proposed in 2007 at a cost of USD1.9 bn and 25 percent of the cost should be borne by the government of Sri Lanka.
"At present none of the state banks are giving loans to the CPC and, therefore, it is impossible for the government to allocate such a huge sum of money to build another refinery in Hambantota," Palitha said. "And again, the Iranian funded refinery will be built for Iranian crude oil," the the JSS branch boss said.
He however insisted that the Sapugaskanda refinery should be renovated as soon as possible. "But, the government has not allocated a single cent for that purpose. At present the production of the refinery is only 20 percent," Palitha noted.
He said refined oil accounted for about 80 percent of the country’s oil imports and it cost more than crude.
The JSS aaccused Minister Weerakkody of not taking any steps to renovate the refinery or to resume bunkering operations.
"We learn that Minister Weerakkody has accepted the resignation letter tendered by the head of Refinery Renovation Forum who decided to leave the forum due to the ministry’s failure to resume the renovation of the facility. And there have been no international agreements in that regard."
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