Cabinet com. raps CPC for petrol crisis

The Cabinet subcommittee that probed the countrywide shortage of petrol has identified five reasons that caused it and ruled that adequate buffer stocks have not been maintained.

Its report, seen by the Sunday Times, lists the following five reasons: The Ceylon Petroleum Corporation’s (CPC) rejection of the fuel stock supplied by Lanka India Oil Company (LIOC) on the grounds that it did not meet the CPC’s specifications.

The biggest reason for the shortage is that the vessel ‘Neveska Lady,’ which was due to arrive in the country on November 2 or 3, was delayed till November 8. The vessel was carrying 30,000MT of 92 octane petrol and 6,500MT of 95 octane petrol. The breakdown of the Sapugaskanda Refinery, which can refine 500MT of oil a day. The refinery was out of action for three days. The committee cannot accept the report that LIOC, after ordering a new stock on the day its consignment was rejected, only informed on October 31 that it would need at least three weeks for the shipment to reach Sri Lanka. A key reason for the shortage was the failure to maintain stocks in line with existing storage capacity. If special attention was directed towards this, there would not have been a petrol shortage even if all four events mentioned above occurred. The subcommittee comprised Special Assignments Minister Sarat h Amunugama as chairman, Disaster Management Minister Anu r a Priyadarshana Yapa, Megapolis and Western Development Minister Patali Champika Ranawaka , Petroleum Resources Development Minister Arjuna Ranatunga.

The committee was tasked with probing the immediate measures necessary to prevent a petrol shortage in the country, reasons for the sudden shortage, persons responsible for the shortage and steps that should be taken to prevent future shortages.

To prevent recurrence, the subcommittee has made seven recommendations. They are: Following modern systems to maintain and manage stocks of fuel. Improving infrastructure required for storage and distribution facilities considering the current weak points within three months. Improving the facilities to pump fuel to the main storage tanks and improving the capacity are among them. Entering into long term purchase contracts, instead of fixing prices for each shipment. The long term contract should be transparent. Have facilities for spot purchases from the nearest countries and entering into an agreement with the respective countries. Improving storage facilities at Muthurajawela to maintain a capacity for 25 days and take into consideration the requirement in three years in view of the increased fuel consumption leading up to 2025. Introduction of methods to reduce the cost of fuel. The capacity in the Sapugaskanda refinery and the storage capacity should be improved. The committee noted that 84 percent of petrol storage and distribution is done by the Ceylon Petroleum Storage Terminal Limited (CPSTL) while the LIOC accounts for 16 percent of the distribution.