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Debt Games

June 11, 2012 (LBO) - Sri Lanka's state-run Ceylon Petroleum Corporation (CPC) has run debts of 65 billion rupees with other state entities by May 31 and talks are on to clear them with a Treasury bond, a minister has said.

Petroleum minister Susil Premjayantha has told parliament furnace oil is still being sold to state-run Ceylon Electricity Board at a loss 37 rupees a litre.

In the first quarter of 2012 CPC has been given a 62 billion rupee bond which is equal to about half a percent of gross domestic product to settle oil given on credit to other state entities.

According to earlier reports these included the Ceylon Electricity Board and SriLankan Airlines.

Analysts have pointed out that the losses at energy utility stem from budget decisions to manipulate energy prices which then covered by increases in national debt which do not get captured in the previous year's budget.

In 2011 Sri Lanka said the budget deficit fell to 6.


9 percent of gross domestic product from 8.
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0 percent in 2012.

It is not clear whether the bond cost is captured in the current year's budget. Minister Premajayantha said in 2009, the CPC has taken a 25 billion rupee bank loan to pay taxes to the Treasury, another move tha

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