All banks barred from granting loans to CPC

The Central Bank has issued a special directive to all banks prohibiting the granting of loan facilities to the Ceylon Petroleum Corporation (CPC) hereafter, CB sources confirmed.

This directive was issued by Central Bank Governor Ajith Nivard Cabraal considering the present financial situation of local banks.

He has warned that the whole banking system will collapse if banks continue granting loan facilities to CPC and he cannot take the responsibility for such a debacle.

Energy Minister Udaya Gammanpila said that the CPC has already exceeded the limit of borrowings and there would be fuel shortage due to the dollar crisis as well as the lack of rupees to buy dollars.

He noted that he had made a written request from Finance Minister Basil Rajapaksa to remove the taxes imposed on imported fuel and to increase prices recently.

 “The request was made after considering the difficulties faced in carrying out operations at the CPC, and its continuous loss-making streak,” he added.

He said the world crude prices have increased to an all-time high of $192.86 per barrel, adding that the Finance Ministry has been informed on the rising world oil market situation, but the Ministry is yet to respond.

As per the data shared, the CPC at present suffers a loss of Rs. 551 million monthly on top of Rs. 83 billion last year.

The Minister noted that the CPC pays tax of Rs. 42 on a litre of 92 Octane Petrol, Rs. 64 on 95 Octane Petrol, Rs. 17 on diesel and Rs. 39 on Super Diesel. Thereby, the Treasury receives Rs. 368 million on a daily basis as taxes from the CPC.

Minister Gammanpila said that even if the Government provides concessions, the CPC will have to increase fuel prices adding that it would be the highest price hike in the history of Sri Lanka. (Bandula)