CPC manages its profit and loss at break-even level

Ceylon Petroleum Corporation (CPC) has been able to manage its profit and loss account at a break-even level last year although it has made a profit of Rs. 3.6 billion up to September.

CPC Chairman Asantha de Mel said that this was possible due to a profit of $50 million earned from the oil refinery. He added that the CPC which was losing Rs. 3.2 billion per month reduced this loss by 50 percent to Rs. 1.6 billion.

He expects massive losses during January and February this year owing to the shut down of the oil refinery for repairs but added that the corporation will be able to earn $6 to 10 million when the refinery resumes its operations after repairs. De Mel made this disclosure when he addressed the launch of the Systems Application Product (SAP) software at Ceylon Petroleum Storage Terminals Ltd this week. He said that they were compelled to raise the fuel prices in January as they were incurring a massive loss. Before the price hike they were incurring a loss of Rs.20 on diesel, Rs.23 on kerosene, Rs.10 on furnace oil and almost breaking even with petrol. De Mel said that the main reason for the recent oil price hike was that OPEC was not increasing output and China and India having a massive demand. However he added that the oil market was difficult to predict and he anticipates the prices should come down in the near future.

Referring to the 350 million-rupee SAP project, De Mel said that it was aimed at enhancing the efficiency of the CPC and it will help to find out the profit the oil refinery makes and correct sales figure on a daily basis.

The SAP is to be implemented by CPC, LIOC and Ceylon Petroleum Storage Terminals Limited (CPSTL). LIOC Managing Director K. Ramakrishnan said that the company had been losing around Rs.550 million per month and that with the recent price hike this loss has been reduced to about Rs.200 million per month. Ramakrishnan disclosed that many companies had adopted SAP before Sri Lanka and that it was a vital and very important beginning for the local oil sector.