News
High-priced diesel puchase from IOC : CEB suffers Rs. 2.1 billion loss
A decision by the Government to purchase 6,000 metric tonnes of diesel at a higher price from the Indian Oil Company (IOC) to reduce power cuts in the first week of April has added to the Ceylon Electricity Board (CEB) losses, CEB sources said.
The CEB had to pay Rs. 2.11 billion
(Rs. 2112.5 million) for the 6,000 metric tonnes of diesel bought from the IOC.
However, if the Ceylon Petroleum Corporation (CPC) had purchased this stock, it would have been possible to obtain it at half the price, the sources said.
The loss occurred due to the fact that IOC sold diesel to the CEB at Rs. 305 a litre, which the CPC sells at Rs. 176 a litre. The IOC price included operation, transport and local costs and ultimately the price was fixed as Rs. 305 a litre, the sources said.
Accordingly, although the fuel cost is Rs. 1.89 billion (Rs. 1893 million), the CEB had to pay the IOC another Rs. 219 million as local charges.
The fuel cost which is about 6 million dollars has been paid by the CEB to the IOC in dollars and only local charges have been paid in rupees.
The stock was transported from Trincomalee to Kerawalapitiya via road because adequate barges could not be found immediately. It had been decided previously to transport the stock via sea from Trincomalee to Muthurajawela terminal and then to the Kerawalapitiya Diesel Power Plant.
It was the CPC which intervened to transport diesel from Trincomalee to Kerawalapitiya. About 10-15 fuel bowsers of the CPC had to be deployed for this purpose and the process took about a week.
Due to this, the CPC did not have bowsers to distribute fuel to depots located throughout the country, and according to a top CPC official, this was one of the main reasons that caused a distribution problem.
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