Former Working Director/ Actg. Chairman, CPC and General Manager, Shell Gas Lanka (Pvt) Ltd.
Here are some thoughts on how to make the Ceylon Petroleum Corporation (CPC) a more efficient organization. Some of the more serious problems it is facing are:
A - Volatility of oil price fluctuations.
The CPC has to do ‘A Balancing Act’ on prices when it has to please the public as well as the government. This is why it has to make more profits from petrol in order to subsidise diesel and kerosene. Rather than continue on present pricing mechanisms it may be appropriate to do some important research on ‘consumption patterns of oil usages’ so as to arrive at actual figures of various categories of oil consumption and see how we can change such consumption.
- One example is the colossal wastage of oil consumption (mainly diesel and petrol) due to traffic congestions on our roads? Some of these traffic snarls can be eliminated easily with imposed discipline on public meetings! Or a better solution may be to shift mass meeting venues to locations outside high traffic zones as anyway organizers know how to transport crowds and show maximum attendance at such meetings.
The government can impose conditions on the type of vehicles to be imported to the country where the import of vehicles with higher engine capacity/higher consumption of fuel can be minimized.
Another way to restrict excessive fuel consumption is to improve on safe and good public transportation systems so that more people will travel by public transport than by use of private cars and taxis.
B - Study new and innovative ways of handling oil purchases.
The CPC should urgently set up an R&D unit in the Commercial Division in order to keep track on world market prices, price fluctuation trends and the behaviour of the oil market globally. It is essential to do ‘Risk analysis’ in forward planning of purchases, hedging arrangements, conduct thorough studies on Purchase Options available, etc., before calling Tenders and Award, and signing of contracts.
C - Minimise leakages and wastage when transporting and distributing oil and have efficient storage systems in operation all the time.
Ensure improved state of the art transportation and distribution systems with periodic checks and controls. It is constantly reported that a lot of wastage takes place at points of loading and loading of cargoes and also due to pipeline leakages. Just imagine the losses sustained even if small leakages, wastages take place in such an operation.
D - The CPC should consider optimum usage of storage terminals so that at times when oil prices drop in international market, more purchases and storage can be organized for the future.
The CPC should be allowed to make use of any unutilized storage at the China Bay Tank Farm. These tanks were leased out to Indian Oil in 2003 amid protests but it is time to renegotiate and at least keep a minimum number for our use for any emergency.
E -The CPC Refinery commissioned in 1965 needs immediate attention for revamping and expansion as we need to have a refinery functioning at maximum capacity for maximum results. The present capacity needs to be doubled or trebled to achieve good savings on refining crude oil.
F – The replacement and provision of additional pipelines required for the transportation of oil from the port to the Kolonnawa complex is essential. Though successive governments’ tried to get rid of the illegal occupants living in and around these pipelines, their vote base was an impediment as political interference stopped all such attempts. I can still remember the efforts made over a decade ago to clear the unauthorized structures and shanties built over CPC pipelines and how such attempts failed. However it is encouraging to note that this government is taking some serious efforts to solve this problem.
G -- When the CPC is celebrating its 50th anniversary, it is important to stress the point that CPC like any other state corporation has its own misdeeds/mistakes some of which may end up as frauds or corrupt practices. The CPC has to blame itself for such fraudulent activities and corruption. We all are aware of the famous ‘Hedging Deal’ and the losses sustained by the CPC. Similarly the recent import parcels of contaminated/ low quality fuels resulting in more losses are good examples.
Any state organization is answerable to the public. The CPC too is bound by a code of ethics and has to adhere to that. |
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