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By Sunimalee Dias-Sunday, March 31, 2013
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The purchase of an additional 120,000 metric tonnes of fuel oil from a Singapore-based company has cost the cash-strapped Ceylon Petroleum Corporation (CPC) an additional whooping US$ 8.9 million (8,935,428), Ceylon Today can reveal.
In spite of financial losses, the CPC has extended the agreement for further six months, to purchase another 480,000-560,000 MT at an inflated price, which would cost the CPC an additional US$ 1.5 million per shipment.
According to the latest terms, which have been inserted to the agreement, PV Oil would receive an additional US$ 5 per barrel. Under these terms, the CPC would lose a minimum of US$ 1.5 million per shipment, according to the documentations of the agreement obtained by Ceylon Today.
The trade unionists alleged the consignment was increased from 240,000 MT to 320,000 MT by the current management, which had executed an arbitrary decision taken by the ex-chairman. The trade unions alleged though the premium offered by the Singapore based company, PV Oil Singapore, was competitive and advantageous to the CPC, the payment terms in the agreement have been arbitrarily amended by the previous administrations.
Trade unionist, Ananda Palitha of Jathika Sevaka Sangamaya said two ex-chairmen had manipulated the agreement in order to grant undue financial advantage to the Singaporean company.
The trade unions alleged, in spite of financial losses incurred due to the previous agreement, the current administration has decided to extend the agreement with PV Oil Singapore for the purchase of another 480,000-560,000MT for the next six months.
According to the latest terms, which had been inserted to the agreement, PV Oil would receive an additional US$ 5 per barrel. Under these terms, the CPC would lose a minimum of US$ 1.5 million per every shipment, the trade unions alleged.
Earlier, when contacted, Minister of Petroleum Industries, Anura Priyadarshana Yapa, said the government would negotiate with the Vietnamese Government over the agreement it had with the PV Oil, which is a Vietnamese State-owned company.
"Since the agreement is a government-to-government agreement, we cannot arbitrarily end it," he said.
Managing Director of the CPC, Susantha de Silva, was not available for comment. Repeated telephone calls to his mobile went unanswered.
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