CPC owes US $165 million to suppliers for fuel imports
Despite the introduction of bonded warehouse facility for fuel suppliers, the Ceylon Petroleum Corporation (CPC) continues to import oil making advance payments, Energy Ministry sources disclosed.
Another tanker of Murban oil is now awaiting payment of US$65 million and waiting at the port for more than three weeks. CPC is still trying to find dollars for the same shipment.
The CPC is yet to pay over $40 million for the already used crude oil whilst over $60 million worth crude is now in storage pending payment with the total payment due to suppliers being $165 million ($65+$40 +$60).
Overall it has received petroleum products (patrol, diesel and crude) worth over $250 million in storage of suppliers waiting for part payments and partial deliveries.
However the Energy Ministry’s new modality of extending bonded warehouse facilities for fuel suppliers is now paying dividends easing the petroleum shortage to a considerable extent, Ministry sources said.
At least three suppliers affiliated with reputed international petroleum companies of oil producing countries have stepped in to import fuel, a senior Energy Ministry official said adding that they have been selected after the evaluation of their Expression of Interests (EOIs).
This system of providing on-shore storage facilities owned by the state free of charge to fuel suppliers to store their imported fuel stocks has enabled the CPC to buy stocks from them as and when required.
The aim was to prevent the delay in clearing oil shipments at the port for several weeks due to the inability of making the payments for spot purchase owing to the dollar scarcity as well as to avoid incurring massive demurrage costs from such tankers, officials divulged.
This practice has ensured energy security and availability of oil as and when it is needed from selected suppliers who have been given permission to use some of the storage tanks as bonded warehouses maintaining fuel stocks.
The CPC has started making profits from July 2022 after the introduction of the cost reflective pricing formula, Energy Minister Kanchana Wijesekera said.
The CPC has lost Rs.2.9 billion in January 2022, Rs. 12 billion in February, Rs.348.97 billion in March, Rs. 239.91 billion in April, Rs. 35.06 billion in May and Rs.678 million in June. In July the CPC had made a profit of Rs.6.31 billion, in August Rs.1.77 billion rupees and in September Rs.5.6 billion, he disclosed.
It had to pay Rs. 251 billion to the Treasury to repay a credit line to India, Minister Wijesekera said adding that the debt service cost of the CPC was about Rs.30 billion and borrowing from state banks was around $ 2 billion.
According to the Ceylon Electricity Board (CEB) Chairman Nalinda Illangakoon, the CEB is now compelled to borrow Rs 50 billion from banks for two months January and February 2023 to pay 12 coal shipments (six shipments each per month) for the Norochchcolai power plant to prevent an electricity crisis.
Kelanitissa thermal power plant was also likely to have shut down on Friday (January 13) due to a shortage of naptha needed to operate the plant, a senior electrical engineer of the CEB said.
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