Hedge Bills

Nov 10, 2008 (LBO) – Sri Lanka's state-run Ceylon Petroleum Corporation (CPC) has already settled a part of its dues on hedging oil contracts and remaining payments would be completed as they fall due, a top official said. A 6.5 million dollar payment had been made Friday and another 7.5 million payment was also due.

CPC Chairman Ashantha De Mel said instructions have been given to the Bank of Ceylon to make payments.

De Mel said a meeting has been held with Central Bank Friday. De Mel said the company had time to settle the bills and a payment to Standard Chartered Bank was not due till the 14th.

Meanwhile the Central Bank said it had no objections to CPC making payments.

"Central Bank does not have to give instructions to CPC which is an independent public corporation," deputy governor W A Wijewardene said.

The CPC had hedged about 30 percent of its oil imports, through an options contract.

Tumbling oil prices have made the deal go against the firm.

De Mel said the firm would have a cost of 27 million dollars on hedging contracts for the past month.

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