Fuel shortage: Minister’s spot purchases an unknown reason

A Cabinet subcommittee named by President Maithripala Sirisena to ascertain reasons for the recent countrywide shortage of petrol found some other revealing facts too.

One of them is a directive by Petroleum Resources Minister Arjuna Ranatunga earlier to cancel three long term contracts and resort to spot buying of fuel. Most were spot purchases thereafter and inadequate buffer stocks was the main cause for the shortage, the Subcommittee held.
Spot purchases are made at market rates prevailing at the time while long term contracts are negotiated at a price considered reasonable for a longer period.

Then, Minister Ranatunga last Tuesday proposed at the weekly ministerial meeting that the state-owned Ceylon Petroleum Corporation (CPC) should resort to long term contracts. President Sirisena directed the Cabinet subcommittee, to continue functioning at his request, to discuss the matter with Minister Ranatunga, and take a suitable decision.

The Cabinet Subcommittee comprises Sarath Amunugama, Anura Priyadarshana Yapa, Patali Champika Ranawaka and Chandima Weerakkody.
As reported earlier, President Sirisena, meanwhile, wants to re-constitute the board of directors of the CPC. The budget debate which ended yesterday had been the cause for the delay.

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