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Fuel purchases from LIOC: CEB is losing millions: TUs

09 Apr 2022

  • TUs claim LIOC required to release fuel during emergencies
  • CPC brokered LIOC fuel sale: CEB Spokesman
By Maheesha Mudugamuwa The cash-strapped Ceylon Electricity Board (CEB) has incurred a colossal loss of approximately Rs. 500 million by purchasing diesel from the Lanka Indian Oil Company (LIOC) for electricity generation, power sector Trade Unions (TUs) alleged last week. It is learnt that the CEB had purchased a total of 6,000 MT of fuel from the LIOC at a rate of Rs. 290.98 per litre which is higher than its local retail price of Rs. 214. Accordingly, the CEB had incurred a loss of Rs. 76 per litre for the 6,000 MT. As revealed by Energy Trade Union (ETU) Convener Ananda Palitha, the agreement to purchase fuel from the LIOC had been entered by former Energy Minister Udaya Gammanpila and former Power Minister Gamini Lokuge citing that there was a shortage of diesel for electricity generation. According to him, the initial plan was to purchase fuel from India, but later on they had decided to purchase fuel from the LIOC. Palitha alleged that the purchasing of diesel at a higher rate by causing a massive loss to the CEB was illegal as per the law; the LIOC is obliged to release available fuel stocks in emergency situations such as these. “The LIOC had only provided the fuel. The CPC had to transport those stocks from China Bay to the Kolonnawa Terminal. For this purpose, the CPC had deployed 33,000-litre capacity bowsers and the fuel transporting train. The transport cost of the train is 89 cents and for bowsers it is Rs. 3.18 per litre,” he stressed. Palitha went on to say that the total loss incurred by the CEB as a result of purchasing fuel from LIOC at a higher rate was around Rs. 570 million and for transportation costs per bowser (33,000-litre capacity bowser), the CEB should pay the Ceylon Petroleum Corporation (CPC) a total of Rs. 104,000. However, when The Sunday Morning contacted CEB Spokesman Additional General Manager Andrew Navamani, he said that it was the CPC that negotiated with the LIOC to supply diesel for electricity generation purposes. He said the CPC was the broker and the rates had been agreed at the current market prices. However, attempts by The Sunday Morning to contact CPC Chairman Sumith Wijesinghe were futile.  

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