Debt Protection

Jan 28, 2013 (LBO) – Sri Lanka’s state-run Ceylon Electricity Board may be asked to import fuel directly to protect the main petroleum distributor from mounting unpaid dues, a media report said. A temporary surcharge on electricity was imposed in February 2012 as part of measures to avert a balance of payments crisis partly triggered by large volumes of credit taken by energy utilities to manipulate tariffs.

Sri Lanka’s The Sunday Times newspaper quoted petroleum minister Susil Premajayantha as saying that state-run Ceylon Petroleum Corporation was due to discuss with the Treasury payment arrears which are rising.

“We are going to propose that the CEB imports its own fuel requirements and the CPC will help only in the transportation of the fuel,” he was quoted as saying.

The report said the CEB owned CPC 51 billion rupees.

The report quoted CEB chairman Wimaladharma Abeywickrema as saying that a recent furnace oil tariff increase by 25 rupees a liter has increased the utilities annual costs by 24 billion rupees.

The CEB was spending 21 rupees a unit to produce power but was selling an an average rpice of 17.50 rupees, the report said.

Abeywickrema said the C