The Petroleum Industries Ministry yesterday rejected claims made by the controversial fuel supplier Vitol Ltd of Singapore and threatened legal action if the company failed to issue a corrected version.

Minister Premajayantha said he had never contacted Vitol Ltd or any of its representatives or approved the re-listing of the company last year after it supplied a stock of furnace oil in an emergency situation.

“The former Ceylon Petroleum Corporation (CPC) chairman had obtained board approval to re-list Vitol Ltd. with the proviso, ‘subject to the approval of the minister’. But I have never seen this board document nor did I give the approval to re-list this company,” Minister Premjayantha said.

He said the minister’s approval was not required to de-list or re-list a supplier and this was a matter for the CPC Board of Directors.

The minister said he would instruct the CPC to initiate legal action against Vitol Ltd., if it did not correct the information set out in a public notice published by the company.

He said Vitol’s notice claiming that the company paid US$150,000 to the CPC as a goodwill gesture to settle a dispute over the supply of a substandard consignment of 20,000 metric tonnes of furnace oil was incorrect.

An excerpt from the public notice appearing in the media states, “Last year a settlement of the dispute was negotiated with Vitol making a payment of US$150,000 to CPC. The suggestion that this was a fine or penalty is incorrect. The settlement was reached with the CPC with the approval of the Chairman of the CPC and the Minister of Petroleum Industries.”

But the minister, who disputed this claim, insisted that the payment of US$150,000 was compensation and not a goodwill payment.

The CPC sold the substandard stock of furnace oil supplied in 2009 to the industrial sector in separate quantities when several power stations had broken down after using the contaminated furnace oil, 7,000 metric tonnes of which remained unsold.

The minister said the payment of US$150,000 was to compensate for the 7,000 metric tonnes of furnace oil.

He revealed that a former top CPC official who had bought a stock of 4,000 litres of subsidized furnace oil for Rs.23.00 a litre for his thermal power plant sold the fuel for Rs.45.00 a litre when he found that the stock was contaminated and in the process made a huge profit.

“He should have returned the stock to the CPC because subsidised fuel is meant only for the state sector,” the minister said. (Sandun A. Jayasekera- Pix by Nisal Baduge)