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JVP fires again at fuel purchases from India
Claims will lead to futher CPC losses
JVP-led trade unions campaigning for the protection of the Ceylon Petroleum Corporation (CPC) have hit out at the Government's decision to purchase petroleum products under the Indian line of credit despite what are widely seen as unfavourable conditions.

The unions at a meeting with Power and Energy Minister Susil Premajayantha protested that the move would deprive consumers of the benefits of price fluctuations and lead to further losses for the CPC.

The protest came after the Minister sought Cabinet approval for the CPC to buy petroleum products from India's Oil and Natural Gas Corporation (ONGC) or its subsdiary Mangalore Refinery and Petrochemicals Ltd. (MRPL) based on proposals made by the Indian company.

Mr. Premajayantha told the Cabinet he was seeking approval for the request made by the CPC to his Ministry. The Minister said that if the CPC had an opportunity to buy petroleum products under the Indian line of credit on competitive tender basis, the Cost and Freight Colombo price would have been more attractive, but CPC was compelled to buy petroleum products from ONGC/MRPL, in view of certain terms and conditions in the Indian line of credit.

On a request from President Chandrika Kumaratunga late last year, the Indian government granted a loan of US dollars 150 million to the CPC for the procurement of petroleum products for six months.

Minister Premajayantha told The Sunday Times the estimates and figures were prepared by the CPC and he was not in a position to comment about the figures mentioned in the Cabinet paper. The Sunday Times learns that under the Indian credit line India has offered to supply 270,000 tons of Gas Oil, 75,000 tons of Jet A1 (Kerosene), 45,000 tons of Gasolene (90 UNL) and 10,000 tons of Gasolene (95 UNL).

Premiums offered for the products by ONGC are much higher than what the CPC can buy in the open market on spot tenders, trade sources said. The CPC is now buying Gas Oil (Diesel) from Reliance Corporation of India at attractive premiums, and about US $ 0.80 cts/barrel, lower. This amounts to US $ 6 per ton which on, 270,000 tons will be about US $ 1.65 million or Rs. 160 million.

Meanwhile, Minister Premajayantha following discussions with trade unions this week promised to refer to the Cabinet a Sub Committee report on sale of the remaining shares of the CPC.

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