DailyMirror
Losses incurred by the Ceylon Petroleum Corporation (CPC) had increased to Rs. 15 billion during the first quarter of this year up from Rs. 12.3 billon reported by end December last year, a report complied by the Petroleum Ministry revealed yesterday.
According to a Central Bank report, the CPC was the state institution that had incurred the highest loss last year. New Petroleum Minister Susil Premajayantha was given the financial report of the ministry as of March 31 after he assumed duties.
Sources in the Ministry told Daily Mirror that the CPC had paid millions of rupees as arbitration fees in lieu of a hedging deal it got involved in, to a firm in London. The CPC incurred a loss of US $ 344 million due to the hedging deal struck with two foreign banks. The CPC is now required to pay this money back to these banks. However, the issue has now been referred to an arbitration panel.
These however are the least of the state giant’s problems as it is owed money by many other state institutions such as the Ceylon Electricity Board (CEB), the Railways Department and the Sri Lanka Central Transport Board are in debt to the CPC for the fuel supplied to them. The cash strapped ‘Mihin Lanka’ is also in debt to the institution. It is also reported that the CPS is overstaffed with numerous political appointments made in the past under different Ministers. “The ministry has had to spend a lot of money in terms of overtime payment for workers. We cannot afford to pay such a colossal sums,” a source at the ministry said.