Oil Commission

Dec 16, 2008 (LBO) – Sri Lanka’s state-run Ceylon Petroleum Corporation (CPC) was instructed to consider a bigger commission to its dealers, by the island’s Supreme Court, as part of directions issued on a new pricing formula. CPC’s newly appointed chairman, Asoka Thoradeniya was instructed to discuss the issue with Laugfs, a distributor that went to court over oil derivatives that subsequently went against the utility.

Counsel representing Laugfs, told court that a 1.7 percent commission for owner operated dealerships was not enough to carry on a sustainable business, compared with 1.5 percent given to dealerships owned by the CPC.

Lawyers told court that owner operated dealerships had to invest in infrastructure, and the insufficient margins had led to abuse by certain dealers.

Sri Lanka’s Chief Justice Sarath Silva said any larger commissions should not be added to the retail price as a 9.71 rupee margin added to petrol by CPC was already too large.

On Wednesday Court is to consider a new price formula for petrol following a public interest petition filed by opposition lawmaker Ravi Karunanayake.