Ministry halts fuel on credit system

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The Ministry of Power and Energy has discontinued the fuel on credit system as many fuel station owners provide post-dated cheques for at least 75 days, which puts the Ceylon Petroleum Corporation (CPC) in a bind.

According to a Ministry spokesman, this has been going on for a long time, and if it continues, the CPC will not receive funds from dealers to import fuel. He said if dealers hand over post-dated cheques with a maximum of seven days, they will not have to discontinue the fuel in credit facility.

He explained that in order to receive fuel the following day, they needed to ask dealers to deposit money the day before.

The main reason for the return of fuel lines outside filling stations, according to Naotunna, is that petroleum dealers lack the financial means to pay for the fuel loads for their filling stations. He noted that they must deposit Rs 6 million with the Ceylon Petroleum Corporation by 9:30 a.m. on days when the petrol bowser arrives at the fuel station. He asserted that the dealers are having trouble paying for the fuel supply in cash because of the customary procedure and the poor financial situation.

He claimed that even banks, both State-owned and private, have ceased writing cheques, and that the CPC now demands cash in hand when purchasing fuel inventories. He claimed that on days when a dealer is able to get funds and place an order for fuel stock, the CPC occasionally forgets to dispatch a bowser.

BY Thameenah Razeek