brand logo

Furnace oil: CPC billed for demurrage

16 Apr 2022

  • Spot tender oil shipment offshore awaiting payment
  • Non-payment of $ 38 m delays unloading for 8 days
  • $ 144,000 loss to due to demurrage charges
By Maheesha Mudugamuwa The failure to unload a shipment carrying 30,000 MT of furnace oil is likely to cripple electricity supplies yet again in the coming weeks, The Sunday Morning learns.  It is learnt that the shipment ordered on a spot tender from Vitol, Singapore has been anchored near the Colombo Port without being unloaded for more than eight days as of Saturday (16) due to the Government’s inability to release the necessary foreign exchange.  The value of the shipment is around $ 38 million.  The Ceylon Petroleum Corporation (CPC) has so far incurred a loss of $ 144,000 as demurrages due to the Government’s inability to unload the shipment within the given time period. It is said that the country is losing $ 18,000 per day for demurrages.  To avert hours-long power cuts, the Ceylon Electricity Board (CEB) is in an urgent need of nearly 25,000 MT of furnace oil, according to CEB Spokesman Additional General Manager Andrew Navamani.  As of Friday (15), thermal power generation was at 12.7% while hydro power generation was at 15.9%. However, the furnace oil requirements of Barge Mounted Plant, Sapugaskanda A and B, Uthuru Janani Power Plant, and West Coast combined cycle were at 280 MT, 300 MT, 300 MT, 120 MT, and 1,400 MT respectively.  The diesel requirements of Kelani GT 7 Gas turbine, Sojitz, and other private plants were at 400 MT, 1,500 MT, 600 MT, and 120 MT respectively.  Speaking to The Sunday Morning, Navamani said the CEB had not received required furnace oil stocks as yet from the CPC. When asked about next week’s demand management, Navamani stressed: “It all depends on how much fuel, including diesel and furnace oil, we receive. We were assured of furnace oil stocks a few days before the New Year but we haven’t received them yet.”  As for the hydropower situation, Navamani said the reservoir water levels had increased. “Since the demand was low, we let the reservoirs fill up. From the rains we received, the reservoir levels have increased from 20% to 30%,” he noted. In the backdrop of the country’s severe power crisis, energy trade unions have raised concerns as to why furnace oil was not ordered under the Indian Line of Credit (LOC).  Attempts to contact Energy Ministry Secretary K.D.R. Olga and CPC Chairman Sumith Wijesinghe were futile.   


More News..