Petroleum Credit

Nov 10, 2008 (LBO) – Sri Lanka’s state-run Ceylon Petroleum Corporation owes 1.1 billion dollars in supplier’s credit to Iran on crude bought in 2008, Chairman Ashantha de Mel said. CPC buys Iranian light crude to feed its 50,000 barrels a day refinery.

CPC struck a deal to get interest free credit from Iran to cover four months of imports in early 2008 when monthly purchases from Iran averaged about 90 to a 100 million dollars.

In October, the utility negotiated to extend credit by a further three months. In early 2008 de Mel said he was only planning to get around 400 to 700 million dollars in Iranian credit.

He said the first payments under the agreement were now falling due.

De Mel said the utility has made a 1.0 billion loss in the first 9-months of 2008 with its refinery turning 22 billion rupees of profits, but the marketing arm had lost 23 billion rupees by selling at government controlled prices.

He said the utility will end the year with a profit, as the cost of 70 percent of imports had fallen to around 70 dollars a barrel, despite recent cuts in fuel prices.