Petroleum Corp’s follies passed on to consumer

The ‘Coalition Against Corruption’ (CAC) charged that the Ceylon Petroleum Corporation (CPC) had engaged in corrupt deals which had resulted in heavy financial loses to the CPC.

Revealing details of the agreement between CPC and PV Oil Singapore, Ananda Palitha of the Petroleum Branch of the Jathika Sevaka Sangamaya said during 2011 and 2012 the CPC had purchased 8 cargo shipments of 320,000 metric tons from PV Oil Singapore and due to the manipulation of the payment clause the CPC had paid an additional amount of over Rs. 1000 million to the company.

“Usually in these agreements the price of a gas oil barrel is decided according to the average price that is recorded two days before and two days after the cargo ship sets sail to Colombo. However instead of halting the transactions with this oil company after substandard oil was discovered, the CPC extended the agreement for another six months and the payment clause said the price of an oil barrel would be decided on the highest price recorded within the two months starting from the date the cargo ships left for Colombo” said Palitha.

He said after the agreement was extended for six months in 2012 January the CPC had incurred a loss of more than Rs. 1400M by paying more than the market price for an oil barrel.

Mr. Palitha noted that even though they brought the corrupt transactions to the attention of the CPC officials and the Procurement Committee members the agreement was further extended for 3 months.

“As per the agreement six more cargo ships of gas oil were ordered and four had already supplied their loads of gas oil to Sri Lanka. For this transaction alone the CPC had to pay Rs. 700 million as additional payments” he said.

He also said a request had been made to extend the agreement for another 12 months and warned that this would result in another loss of Rs. 4000 million if the Cabinet approved the agreement, adding that these huge losses were covered by increasing the fuel prices and passing the burden on to the consumer.

Mr. Palitha urged the government to take action against the officials involved in these corrupt deals and added that not even a charge sheet had been issued to those officials who imported substandard oil in 2011, though it caused major losses to many vehicle owners. (Sarasi Paranamanna)