Petroleum Industries Minister Susil Premajayantha told Parliament this week that the government has earned a ‘high profit’ by converting the substandard jet fuel that was imported to kerosene because of the discount the supplier, British Petroleum (BP) Singapore, gave.
The minister said the 7,500 tons of substandard jet fuel would be used as kerosene as they had received a commission of a quarter US dollar.
He said there was no shortage of jet fuel or delay in providing fuel for use at the airport. He pointed out that the Ceylon Petroleum Corporation would not be incurring a loss as the jet fuel would be used as kerosene.
Mr. Premajayantha said the company that provided substandard jet fuel and the company which issued the quality assurance certificate for the stock would be probed by the CPC and a decision would be made on the action to be taken against them.
The Sunday Times reported last week about the import of jet fuel which was found to be contaminated.
Minister Premajayantha explained to parliament this week the circumstances behind the import of this stock.
He said the CPC in terms of the prescribed tender procedure had imported 20,000 tons of Jet A-1 fuel oil and 20,000 tons of diesel from British Petroleum in Singapore. The stock was delivered at the Colombo Port on April 25 but was not unloaded.
Tests conducted at the Kolonnawa and Sapugaskanda laboratories showed that 7,500 tons of the Jet A1 stock stored in one tank of the ship was found to be slightly below specifications. The rest of the stock of 12,500 tons matched the specifications and the substandard stock was rejected.
Later the representatives of the fuel supplying company arrived and conducted their own tests. They also found that the stock was not up to the standards, he said.
Considering the huge loss which the company could have incurred by turning back the substandard stock, it offered to sell the substandard 7,500 tons at the price of kerosene and offered a commission of a quarter dollar on a barrel. The company also agreed not to charge the delayed tariffs from the CPC, the minister said.
The CPC purchasing committee decided on April 27 to buy the sub-standard jet fuel for the price of kerosene along with the commission and the transaction had not caused any financial losses to the CPC, the minister said.