The government has issued Treasury Bonds worth Rs.60 billion to offset a part of the massive Rs.1,007 billion owed to the Ceylon Petroleum Corporation (CEYPETCO) by the government and semi-government institutions.
The bail-out plan has been declared in the wake of some 20,000 CEYPETCO employees agitating for a 45 per cent salary increase.
The debts had reached a colossal Rs.100,690 million as at end December last year in addition to the accrued interest of Rs.40,690 million.
The main defaulters on fuel purchases last year were the Ceylon Electricity Board (CEB) with Rs.614 billion; West Coast Thermal Power Plant with Rs.46 billion; SriLankan airlines with Rs.121 billion; Sri Lanka Railways with Rs.35 billion; Mihin Lanka with Rs.11.5 billion; SLTB rupees one billion; the Road Development Authority (RDA) with Rs.530 million; Maga Neguma with Rs.214 million.
The other main defaulters are the Sri Lanka Army with Rs.60 billion, Sri Lanka Navy with Rs.101 billion, Sri Lanka Air force with Rs.9 billion and the Police Department with Rs.106 million.
“We cannot go on with such a massive amount outstanding. Increasing fuel charges is out of question. Therefore, the Cabinet decided to permit a bail-out plan for CEYPETCO with Treasury Bonds to offset a part of outstanding amount without hindering the interests of both parties,” Minister Susil Premajayantha said.
The minister ruled out the possibility of an immediate fuel hike but added that the government was watching closely the fluctuation in the world market fuel prices and at other political developments that could affect the world fuel trade.
He said CEYPETCO was committed to issue fuel to all these government and semi-government establishments as they provided a national service.
However, Power and Energy Minister Patali Champika Ranawaka said the amount owed by the CEB to the CEYPETCO had been accumulated before December 31, 2009 and the fuel bills after that date had been fully paid.
Meanwhile, the Treasury’s Management Audit Department Director General Wasantha Ekanayaka has been appointed as the acting chairman of CEYPETCO following the resignation of former chairman Harry Jayawardana. (Sandun A. Jayasekera)