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CPC receives 67 proposals for supply of petroleum products

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Business
Minister Wijesekera

Sri Lanka has explored the idea of increasing prices in premium products, Energy Minister Kanchana Wijesekera said.

Minister Wijesekera in a message on Twitter yesterday (25) said that currently 95 Petrol and Super Diesel daily requirements are less than 10% of the market share. Noting that driving up prices significantly on both will not be a solution, the minister said it would create an artificial demand for lesser priced products.

Minister Wijesekera also mentioned that CPC placed an advertisement three weeks ago for anyone who can supply petroleum products to submit their proposals.

“67 such proposals were received, all were evaluated by the tech committee, 39 were shortlisted, got them all together and spoke to them last Tuesday. We clearly communicated to them our possible payment plans, our requirements and answered all questions they had. Further to that the President, Prime Minister and MOE have made requests from oil producing countries for their support and credit lines.”

Requests are made from anyone who can supply products to our requirements and the best pricing possible to submit proposals to the Ministry of Energy or CPC to evaluate them, which we will do in 48 hours. Earlier Minister Wijesekera said that Kerosene remains one of the key contributors to losses incurred by CPC .

“They also sell other premium products which have a higher markup. CPC supplies to CEB, CTB, CGR and other government institutes which owes money to CPC. And the staff numbers are staggering too.”

Meanwhile cabinet approval was granted to reintroduce a fuel pricing formula to adjust fuel prices on a bi-monthly or monthly basis to reflect input costs. According to the Minister the new pricing formula is based on six factors, which includes costs related to unloading, taxation, production, operational and administration as well as profit margin, and contribution to the Fuel Price Stabilization Fund. Accordingly, Ceylon Petroleum Corporation (Ceypetco) raised the price of fuel in line with the pricing formula on May 24.

“Fuel pricing formula that was approved by the cabinet was applied to revise the prices. Price revision includes all costs incurred in importing, unloading, distribution to the stations and taxes. Profits not calculated and included.”

“Cabinet also approved the revision of transportation and other service charges accordingly.

The formula will be applied every fortnight or monthly. Request the Transport sector to discuss the revision of rates and not to disrupt transportation for the candidates sitting O/L,” Minister Wijesekera said.

The Central bank of Sri Lanka also stated that it is essential to revise tariffs in the energy sector with a cost effective pricing mechanism in order to strengthen the financial position of the state owned business enterprises in the energy sector.

(IH)

 

Thursday, May 26, 2022 – 01:00











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