Shocking details of how loss-making state-run Ceylon Petroleum Corporation has over paid millions of rupees as commissions to its dealers without considering the stipulated official procedure have been revealed in a recent audit inspection report of the Auditor General’s Department.
With the aim of streamlining the payment of commission to dealers the Board of Directors has taken decision (Board paper No05/12/31) to change existing practice of paying 2.5 percent of the price per litre of fuel to 3 percent fixing upper and lower limits (upper and lower caps).
Accordingly the dealers commission has been increased with effect from 30-06- 2019 fixing the upper cap for 92 petrol as Rs 167 and lower cap Rs 117.
This means even if the price of 92 petrol is increased to over Rs.167 or decreased to below the limit of Rs117 the commission will remain unchanged as 3 percent, similarly for 95 petrol the upper cap was fixed at Rs 170 and lower cap Rs.128.
The price of fuel has been increased on 21- 06-2021 and the price of 92 petrol increased to Rs 157 from Rs 117 the previous price in 2019 and the 95 petrol to Rs. 184 which has gone up beyond the upper cap of Rs.170.
However the CPC has paid Rs 5.52 per litre of 95 petrol calculating 3 percent of Rs.184 although it should have been Rs.5.10.
The over payment of around Rs 4 billion had been paid during the period of 11-06-2021 to 15-07-2022, the Auditor General’s inspection report revealed.
According to this report the commissions of Rs.10.59 billion was paid to dealers in 2017,Rs. 13.54 billion in 2018 Rs.14.13 in 2019, Rs.12.40 billion in 2020, and Rs.14.48 billion in 2021.
When Petrol 92 was priced at Rs. 470 per litre, CPC paid Rs. 14.10 in commission per litre whereas, according to the fixed upper limit cap price, it should have only been Rs. 4.86.
The CPC has initiated action to recover this money from dealers in four installments by issuing circular on 10 -03- 2022 a top official of the CPC said.
He added that four dealers filed a petition at the Colombo District Court to find redress on the payment and Court issued an interim injunction restraining the payment to CPC and it was revoked on 15-07-2022.
The official noted that the court had also granted the approval to claim the overpaid commissions from all its dealers in Sri Lanka.
With this court order, The CPC will be able to recover Rs. 4.3 billion from roughly 700 fuel stations and save a minimum of Rs. 50 million on a daily basis.
