Ceylon Petroleum Corporation says its operations are not viable unless the government sticks to the pricing formula agreed to as part of the sector restructuring. Ceylon Petroleum Corporation says its operations are not viable unless the government sticks to the pricing formula agreed to as part of the sector restructuring. CPC is waiting for confirmation the government will pay an overdue subsidy payment of over Rs. 3.5 billion to finalize its accounts for last year.
Altogether the government owes the CPC Rs. 6.5 billion in overdue subsidies for the last 6 months.
Government subsidy on fuel touched Rs. 16 billion, or nearly 1 percent of GDP, last year as international crude oil prices rose but retail prices were not adjusted in step.
The subsidy was nearly double the amount the government planed to spend.
However, the government owned CPC and Lanka IOC (LIOC) the two players in petroleum marketing are owed around Rs. 7.5 billion in unpaid subsidies for 2004.
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LIOC says the government has promised to pay the money owed.
However State owned CPC is still to get an assurance that Rs. 3.5 billion in outstanding subsidy payments for last year will be