Fuel Losses

July 06, 2010 (LBO) – Sri Lanka’s state-owned oil refiner, Ceylon Petroleum Corporation (CPC), continued to suffer losses in the first half of 2010 an official said. The CPC is also owed billions by state institutions which buy fuel from it do not repay, indirectly financing the budget deficit through bank credit.

Petroleum ministry secretary Titus Jayewardene said the refiner, which has a 50,000 barrels a day refinery at Sapugaskanda, north of Colombo, suffered a loss of 7.5 billion rupees in the first three months alone.

“In the first two months of this year because the Sapugaskanda refinery was closed for maintenance all petroleum imports were refined products,” Jayewardene told our sister news website Vimasuma.com.

“Therefore, the CPC’s losses increased sharply.”

In the following three months the CPC was estimated to lose about two billion rupees a month, he said.

This may put the total losses of CPC at about 13 billion rupees for the first half.

In Sri Lanka imported final products are taxed at a higher rate that domestically refined to give an advantage to CPC over the second retailer, Lanka OIC, a unit of Indian Oil Corporation.