Dayasiri warns of steep CPC revenue loss due to entry of foreign fuel companies

By Rathindra Kuruwita

Dissident Sri Lanka Freedom Party (SLFP) MP, Dayasiri Jayasekera, has expressed concern over a potential 50% drop in the revenue of the Ceylon Petroleum Corporation (CPC) due to the entry of foreign companies into the petroleum market.

Jayasekera highlighted the adverse impact of the policies of successive governments on the CPC.

“The nationalisation of petroleum infrastructure was a great victory for the country. However, we have ruined the CPC. The government said the price of fuel would drop when new companies enter the retail fuel trade, but all companies sell fuel at the same price. Prices won’t go down even if United Petroleum Australia and US-based RM Parks come either,” he said.

The MP emphasised that when the CPC was the sole fuel retailer, money spent by Sri Lankans on fuel remained within the country. The CPC’s retail fuel revenue typically ranged between 78 and 83 billion rupees.

Earlier, one of the conditions imposed on the new entrants was that the money earned by selling fuel could be taken out of the country after one year. The money earned by selling fuel can be converted to US dollars only nine months after the sale of it. The other condition was that one percent of the monthly revenue would be held by the Ministry of Power or an institution assigned by the government.

“These conditions were initially imposed because the government said neither the Ceylon Petroleum Corporation (CPC) nor the Lanka IOC had maintained adequate dollar reserves to buy fuel, leading to shortages in 2022. These conditions were also imposed to ensure these companies did not take away the profits immediately,” he said.

However, this was later scrapped by the Cabinet. “They are now saying that since the economy has stabilised those companies can convert rupees into dollars and take it out almost immediately. Apparently, the government will earn about 1.5 billion from these companies when they get their businesses running. But the country will lose over 40 billion,” he said.

Jayasekera highlighted that as per the agreements signed between the government and the prospective retail fuel companies, a stipulation was set that required these firms to initiate operations within 45 days of signing the agreement. However, Jayasekera pointed out that RM Parks, despite signing the agreement nearly six months ago, has yet to commence operations as per the agreed terms.

Dr Ashoka Ranwala, President of the General Employees’ Union of the Petroleum Corporation, said the SLFP MP’s concerns were valid and that the government was trying to undermine the CPC and other state-owned enterprises.