Allow free and fair competition among fuel suppliers-report
Some of the limitations that the Ceylon Petroleum Corporation (CPC) did have in the past six months were the money it owed to the supplies with long standing suppliers that are still owed about USD 800 million.
When long standing suppliers are not able to supply since they haven’t been paid and not offered any credit period new suppliers that are coming in do not want to provide any credit facility and they do want to secure their payments. So they request for advance payments, pre payments high premiums because of the risk that they are taking providing the CPC right now. So that limits the ability of the CPC to go into different markets to get the best supplies, Minister of Power and Energy Kanchana Wijesekera told the report launch on ‘Public Private Partnership Model for Ceylon Petroleum Corporation : An analysis of Opportunities and Challenges.’
He however said with the new electricity tariff revisions coming in there would be a better chance to recover some of the debts from the CEB owed to CPC. The minister said with IMF and other development agency support coming in and the restructuring work being proposed, six months from now the country could see a much better situation in terms of petroleum products distribution, supply and revenue.
Speaking at the event the co-author of the report Dr. Janaka Fernando said “the Sri Lanka economy is facing its worst economic crisis in its post independent era. In this juncture, PPP is a tool that can help the government of Sri Lanka to manage development projects and other services as off-budget expenses while increasing the efficiency in project delivery and operations. However, misconception and misinterpretation of PP models need to be addressed.”
The report provides some key policy recommendations for the Government which includes having open discussions with all stakeholders such as government, trade unions and potential investors; sector-related PPP-models and privatization; Evaluate and Reduce Subsidies; Minimize Currency Risks, Increase Liquidity; Introduce a transparent pricing mechanism that covers all costs; Breaking the monopoly of aviation fuel; and allow for free and fair competition among fuel suppliers while enforcing a transparent anti-trust legislation.