None of the Ceylon Petroleum Corporation (CPC) management or any government institute for that matter has any accurate data on the assets and liabilities or any other data that should be there in a private or government institute and he would be focusing on auditing the entire institute to get the accurate data said Minister of Power and Energy Kanchana Wijesekera addressing a report launch by FNF and JAAR in Colombo recently.
The minister said the fuel pricing formula (FPF) should be a transparent formula and not something that should be handled by politicians. He said by introducing a FPF they wanted to ‘one thing’ get the cash flow back to the CPC and also invite other suppliers and international partners to come in and invest in the petroleum industry.
“I don’t think anyone would invest in Sri Lanka if there is a mechanism where the government controls the pricing without profit to them. We have also liberalized some of the facilities and resources that we have with the CPC. We have allowed bunker suppliers to supply more products to the industries and have shared our facilities, stock tanks and we are on the verge of opening up the jet fuel products as well to other sectors to compete with CPC. In that way the public will have the continued supply and a competitive price and I don’t think anyone will have a monopoly in the petroleum sector.”
The minister said that they called for EOIs and 24 companies have shown interest and he expressed hope that by the end of next month there will be two to three players in the Sri Lankan petroleum industry with CPC and LIOC. The Minister said they had no prior commitments with the IMF and the things that they did was basically what needed to be done. He said the CPSTL could enter into a partnership with new private partners coming in or provide them its service for a fee. He also said regulation would be important when private suppliers come in and the matter is under discussion.
When new suppliers arrive the formula will be a base for calculation the pricing but it will have to be regulated as well. With multiple supplies coming in it will be possible to allow the supplies also to work with the regulatory arm to decide on the pricing. Wijesekera said one of the biggest burdens of the CPC is inefficiency with most of the staff not performing their jobs that they should be performing. He said there are about 159 people working at LIOC which operates 254 outlets. The CPC and CPSTL has a 4,200 strong workforce for 1,200 outlets . He said when he spoke to LOIC they said they were looking at 50 to 60 outlets whereas in CPC maybe 60 people are looking at one outlet. “That’s the difference,” the minister said. One of the main areas that we need to change is the post of the Managing Director. The MD should be one who is experienced in this sector not a political appointment and a person who can stay there for may be 6 to 8-year period and contribute to a better management. There also needs to be a restructuring in the workforce, he said.
The minister said they pay over Rs 550 million monthly for the distribution of petroleum products which is a massive burden on CPC and the country should move into pipelines. That was one of the reasons that they invited private suppliers because they invest in infrastructure. He said they were also looking at upgrading their refinery and he said Sri Lanka needs to move away from 92 Octane petrol and Lanka auto diesel and go into more premier products.
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