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Ministries in fuel row: Rs. 8 b worth stocks may go to waste
View(s):By Damith Wickremasekara
The Petroleum Industries Ministry and the Power and Energy Ministry are at loggerheads over a multi-billion rupee fuel purchase — with the Ceylon Electricity Board (CEB) turning down the latest imports.
Two shipments of furnace oil and low-sulphur diesel ordered by the Petroleum Ministry are on the way to the country. They cost more than Rs. 8 billion or US$ 60 million, but the Power and Energy Ministry has declined to buy them as the CEB’s hydropower generation capacity has increased due to the recent heavy rains. Petroleum Industries Minister Susil Premajayantha told the Sunday Times that the orders had been placed three months ahead on a request from the CEB and the Letters of Credit were opened on a loan from a state bank.
“These fuel stocks cannot be made use of for other purposes and therefore we will not be able to sell these products. If the CEB does not purchase these stocks it will be a loss to us,” Mr. Premajayantha said. He said his ministry would be forced to refrain from opening of LCs to import fuel for the CEB under these circumstances. “We will meet Treasury officials and inform them that the CPC will no longer import fuel for the CEB, and if necessary only provide transport,” he added.
He said the CEB had also failed to pay up more than Rs. 60 billion in arrears owing to the Ceylon Petroleum Corporation (CPC).CEB Chairman Wimaladharma Abeywickrema said the hydropower generation capacity which had dropped to 14 per cent had now risen to 80 percent and therefore the CEB would take the maximum benefit of the situation.
“The public will accuse us for not taking advantage of the recent rains if we do not generate hydropower and continue to use thermal power during the rainy season. This is the period we could increase our profits. We cannot continue to suffer losses,” he said.
Prof. Abeywickrema said, however, the CEB would consider purchasing at least a small part of the stocks that were being imported. Both, the CPC and the CEB were suffering heavy losses. The CPC last month increased the price of a litre of petrol by Rs. 10 saying it was suffering heavy losses while the CEB is due to send its 2012 financial statements to the Public Utilities Commission with a view to revising the electricity rates.
The CEB’s losses for 2012 are estimated to be around Rs. 40 billion while the arrears due to the CPC are more than Rs. 100 billion.
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