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CPC team in India for talks
By Chris Kamalendran
With trade unions breathing fire against privatisation and another fuel price hike on the cards, an official Sri Lankan delegation is in New Delhi to finalise matters relating to the privatization of the Ceylon Petroleum Corporation (CPC) and an Indian credit line of US$ 150 million.

The state-owned CPC, which earlier enjoyed the monopoly of fuel import and distribution, has now as its partner the Indian Oil Corporation. The IOC owes the CPC Rs. 400 million – the price forpetrol purchase from the CPC. Now, the CPC wants to bring a third partner, India's Bharat Petroleum.

The IOC now buys petrol from the CPC though it imports diesel and kerosene on its own. The petrol purchases are currently done through the CPC until the oil storage facilities are available.

The IOC on Monday deposited Rs. 195 million from the total outstanding debt, a day after The Sunday Times reported that the Indian company owed the CPC a huge amount.

CPC Chairman Jaliya Medagama and Commercial Manager K.S.W. Kottachchy are in New Delhi meeting top officials of the two Indian companies. Talks with the IOC centre on obtaining outstanding payments and briefing it on the ongoing privatization moves. Their talks with officials in Bharat Petroleum cover the CPC sale of 100 fuel distribution outlets to it. Some finality of these talks will see Treasury Secretary P. B. Jayasundara signing a formal agreement with Bharat Petroleum.

Power and Energy Minister Susil Premajayantha and Indian High Commission's spokesperson M. Malik confirmed talks were being held in India, while CPC trade unions -- which were earlier told there were no moves towards privatization -- have threatened trade union action. Minister Premajayantha told The Sunday Times talks were under way with trade union representatives on various issues.

These moves come as President Chandrika Kumaratunga warned of a further fuel price hike. She told her Cabinet this week that petrol prices would have to be increased by Rs 3.50 a litre and diesel by Rs 2.

Meanwhile President Kumaratunga in a bid to reduce the burden on the consumers had proposed that a coupon system be introduced to bus owners and three-wheel owners enabling them to purchase fuel at lower prices, but cabinet ministers opposed the move saying that there would be practical difficulties in implementing the system. The President did not give any dates for the next fuel price hike but it is likely before the budget next month.

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