Sunday, June 16, 2024

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SL fuel purchase at sport price hits Forex reserve rock bottom

With its creditworthiness shot, the Sri lanka government is buying oil at spot prices, that is, the going rate as container ships pull into port causing millions of dollars for demurrages and overpayments for consignments.

Recently, as a tanker docked outside Colombo Port , the price of its diesel cargo increased from $35 million to $50 million,official sources said.

The Ceylon Petroleum Corporation (CPC) has lost millions of US dollars in fuel purchases by resorting to spot buying from the market even though there is a US$ 500 million Indian credit line to import petrol and diesel.

The over-payments for fuel consignments and demurrage for the delay in clearing shipments due to difficulty in finding dollars along with irregularities of corrupt officials were some of the reasons for these losses, an official observation report revealed.

It has been observed that the CPC has also paid a sum of US $22 million as over-payments for four consignments of fuel procured under spot purchasing recently.According to official documents relating to the payment of a recent shipment of fuel, the pre invoice of the payment received on March 22 has indicated the price of the fuel consignment as $52 million.

But the final invoice sent thereafter has stipulated the price of the same consignment as $39 million. Ignoring the final invoice, the CPC has paid $52 million in settling the payment of the shipment on April 24, paying $13 million more than the last stipulated amount.

Another sum of $9 million over-payment had been paid for three other fuel consignments totaling $22 million, the report indicated. Further a sum of $4.2 million had been paid as demurrages by the CPC for shipments delayed at the port since this government came into power.

The CPC paid $558,000 for a recent consignment of petrol imported from Vitol Company under short term spot purchasing, it added. It has been revealed that this money could have been saved if the authorities expedited the fuel shipments under the Indian credit line, it said.

The Energy Minister has called for a comprehensive report on losses in spot purchases including demurrages and over-payments made by the CPC, a senior ministry official said. Delivering on India’s commitment to the people of Sri Lanka, close to 40,000 MT of petrol reached Colombo on Wednesday, the Indian High Commission in Colombo said.

With this Sri Lanka has received around 440,000 MT of various types of fuel from India with more to follow, it said in a Twitter message.

Sri Lanka is facing a shortage of diesel as the ongoing economic crisis worsens in the island country, Minister of Power and Energy Kanchana Wijesekera said on Thursday.The Minister told Parliament that the country needs 4,000 metric tonnes of diesel per day

However, the state-owned Ceylon Petroleum Corporation is currently only releasing 1,000 to 1,500 metric tonnes a day.

Currently there is no shortage of petrol supply in the country, he said, adding that around 3,000 metric tonnes of petrol has been released on a daily basis, and that a ship carrying 40,000 metric tonnes of petrol arrived in Sri Lanka on Wednesday night.

Sri Lanka has been suffering a diesel shortage since February, which led to hours of daily power cuts.

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