Nov 27, 2008 (LBO) – A team of Sri Lankan ministers is probing an oil hedge that could lose hundreds of millions of dollars to a state-run oil retailer amidst claims that the oil retailer had not informed the cabinet clearly about risks of derivatives trading.
A committee made up of four ministers is now probing the deal, where the Ceylon Petroleum Corporation (CPC) is locked into buying about a third of its 2.5 million barrels per month imports of oil at around 100 dollars when the market price is half that.
“The principal mandate for that committee is to identify what are the options available for the government, and design what is the most appropriate action for the government to take,” international trade minister G L Pieris who is in the committee told reporters.
Petroleum minister A H M Fowzie and two others make up the rest of the committee.
Mass media minister Anura Yapa says the cabinet of ministers was not given a clear picture of the controversial hedging deal.
CPC chairman Ashantha de Mel said earlier the deals were made on cabinet instructions which had not allowed the petroleum firm to make up