The Ceylon Petroleum Corporation (CPC) claimed yesterday that it could not pass the full benefits of world fuel price drops to the people because it was suffering heavy losses and overdue payments amounting to about Rs. 80 billion.
Chairman Asantha de Mel said the CPC’s losses were more than Rs.23 billion and it was saddled with an outstanding debt of Rs.57 billion. Therefore it was not able to reduce domestic fuel prices further.
The Ceylon Electricity Board alone owed the CPC Rs. 44 billion of this amount, he said.
Despite international prices of crude oil dropping from US$ 147 a barrel in July to about US$ 60 this week, the government was only able to reduce diesel prices by Rs.30 a litre, kerosene by Rs.20 and petrol by Rs.15.
Mr. de Mel also claimed the CPC still had to pay for the oil it bought in May, June and July when prices were high.
He said the CPC purchased crude oil on six months’ credit. Accordingly the full benefit of the currently low prices could only be passed down to the consumers in May.
“When international prices were high we didn’t increase domestic prices on time and we subsidized diesel prices as much as we could. This is certainly not the ideal time to reduce prices as well because we are still paying expensive oil bills for June and July,” he said.
Mr. De Mel said he was concerned as to how the CPC would manage with the rapidly increasing amount of government debt yet to be paid to the corporation.
Meanwhile, Lanka Indian Oil Company Managing Director K. Ramakrishnan said his company would assess the situation regarding the new import prices and see how it would affect the company and its selling price. However, he said that the LIOC would in no way divert from the prices set by the CPC.
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