By: Staff Writer
Colombo (LNW): The State-run Ceylon Petroleum Corporation (CPC) has pocketed out massive US $ 170 million in demurrages last two years due to delay in claearing fuel shipments, informed sources said.
The Ceylon Petroleum Corporation (CPC) had been compelled to pay $170,873,816 as demurrage costs in the last 02 years for oil shipments obtained out of procurement process and under emergency purchases.
The government audit has revealed that the CPC has paid USD 1,651,470 in 2021 and USD 169,222,346 in 2022 as demurrage costs.
The cost has risen by 924 per cent in 2022, compared with the previous year.In addition to demurrage costs, a large sum has been footed as premiums, reports add.
Meanwhile, CPC officials were summoned to a COPE meeting recently. During the meeting, it was revealed that while there are no demurrage costs in 2023, such costs which took place in 2021 and 2022 still exist.
Also, the Auditor General had mentioned that a special audit investigation has been initiated in this regard and the report will be prepared and completed within a month. The Auditor General pointed out that the matter can be discussed at length after the report is compiled.
During the meeting, it was also discussed whether steps have been taken to recover USD 21 million that should be collected due to the non-delivery of crude oil as agreed with suppliers.
Sources within the CPC close to the subject said that this staggering financial outlay translated to a substantial loss for the corporation.
The underlying cause, as disclosed by CPC insiders, points to mismanagement by CPC officials.
In addition, as disclosed in the CPC audit report for 2021 (the latest available), the demurrage claimed by suppliers in 2021 surged from Rs. 67 million to Rs. 400 million – an alarming fivefold increase compared to 2020.
However, the precise demurrage costs incurred by the corporation were not transparently presented in the financial statements for the reviewed year, as noted in the report.
Moreover, the report attributes these losses to the deteriorated condition of the pipeline, causing delays in unloading fuel stocks.
