ISSN: 1391 - 0531
Sunday, July 29, 2007
Vol. 42 - No 09
Financial Times  

CPC: Better management practices to cut costs

By Bandula Sirimanna

The Ceylon Petroleum Corporation (CPC) is using better management practices to reduce overhead costs and recover massive debts of over Rs 30 billion from public and private firms without raising fuel prices, Chairman Ashantha de Mel said.

He said the CPC had already recovered Rs 1 billion from debtors through the Treasury. CPC figures show that the Ceylon Electricity Board (CEB) is the biggest debtor at Rs. 15 billion and since the government has pledged not to raise power tariffs this year, this debt is likely to remain, De Mel said for this purpose they are compelled to sell diesel to the CEB at 25percent below cost.

Other big debtors include- Sri Lanka Railway (Rs. 1.7 billion), Sri Lanka Army (Rs 2.5 billion), Navy (Rs 850 million) and the Air Force (Rs 780 million).

Private fuel distributors owe Rs.1.05billion while the Lanka Indian Oil Corporation owes Rs. 170 million.

Referring to the Rs 50 million owned by controversial state owned airline Mihin Air, De Mel said that this matter had now been settled and the airline was paying its dues.

Petroleum Resources Ministry sources said although the airline had exceeded its Rs 22 million bank guarantee for the purchase of aviation fuel, the CPC as a policy did not stop issuing oil to state owned institutions on non-payment and has no intention of discontinuing the fuel supply to Mihin Air.

De Mel noted the main factor behind the recent fuel price hike was escalating world crude oil prices and not the non payment of fuel bills by public and private sector institutions.

He said the CPC is now operating by setting off a part of the losses with refinery profits which is about Rs 200 million a month.


Top to the page

Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.