Minister of Power Energy Kanchana Wijesekara said there are eight causes for Ceylon Petroleum Corporation’s (CPC) loss, including a 25 per cent salary increase for CPC employees under a collective agreement since 2012.
According to a Spokesman for the Ministry of Power and Energy, the highest loss occurred after 2015.
In a tweet, the Minister said selling products at subsidised prices for years is also one of the reasons for losses.
The spokesman said this is due to the delay in establishing a fuel price formula and not increasing prices at the appropriate moment.
Wijesekara said purchases made before March 2022 were for 90-180 days credit purchased at Rs 203 for a USD and the payback rate is Rs 367-390 for per USD, pointing out that rupee devaluation also led to CPC making losses.
He further noted that SriLankan Airlines owed USD 300 million to CPC and Rs. 60 billion from the Ceylon Electricity Board (CEB).
He also said the financial loss is a result of purchasing high premiums, paying demurrage, and paying bank interest.
Wijesekara, added that the CPC is overstaffed, inefficient, and overpaid.
He pointed out that the CPC was not running refineries and relying more on imported refined products, as well as expensive distribution spending.
According to the CPC spokesman, in order to restructure the institution, a committee was formed under the chairmanship of Minister Wijesekara, with the Ministry Secretary and a member from the Treasury as members.
He noted another measure taken to change the institution from a loss-making to a profit-making one was the decision to merge CPC with Ceylon Petroleum Storage Terminals Limited (CPSTL).
By Thameenah Razeek