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CEB, CPC at odds over higher rainfall, less fuel imports
View(s):Higher rainfall received last year drastically reduced the quantity of fuel oil required for power generation, resulting in a considerable decrease in fuel imports, says the 2013 Annual Performance Report of the Ministry of Petroleum Industries.
This drop in fuel imports yielded “high economic benefits” to the Ceylon Petroleum Corporation (CPC), it reveals. Despite this revelation in the Ministry’s annual report, the Ceylon Electricity Board (CEB) maintained its fuel adjustment charge throughout 2013, claiming that it was paying high prices to generate electricity through diesel-powered plants, because of low rainfall over hydroelectric reservoirs.
The report reveals that there was no import of high sulphur fuel oil in 2013, whereas 229 metric tons (1,496 barrels) were imported in 2012. Meanwhile, the import of low sulphur fuel oil reduced from 305 metric tons (2,179 barrels) in 2012 to 69 metric tons (451 barrels) in 2013.
The CPC was forced to make spot purchases despite several term contracts entered with major oil suppliers on a Government-to-Government basis, the annual report says. “Some of these spot purchases were due to US sanctions which resulted in non availability of the correct crude oil type for processing by the refinery.”
Spot purchases sometimes compel CPC to pay higher premiums on imports, it said. “In spite of this, the CPC has been able to enter into/extend many term contracts beneficial to the Corporation,” it said.
The annual income statement of the CPC shows that it paid out Rs 214.49 million by way of “hedging expenses” in 2013. The figure was Rs 7,611.60 million in the previous year.
CPC’s overall annual loss has reduced dramatically from Rs 96,135.60 million in 2012 to Rs 6,955.16 million (consolidated accounts) in 2013.
It is also revealed that the monthly Brent price of a barrel of crude oil varied greatly in 2013. The price at the beginning of the year was Rs 14,518 per barrel, which dipped to Rs 13,012 in April. It ended the year at Rs. 14,247 per barrel. Despite this, local prices remained high.