Thanks to its generosity to gas station owners, CPC bleeding to death, says FSP
The Ceylon Petroleum Corporation (CPC) will lose about Rs. 25 billion in the coming 12 months at current rates, if it does not adjust the commission paid to gas station owners, Education Secretary of the Frontline Socialist Party (FSP), Pubudu Jagoda, told The Island yesterday.Jagoda said that the CPC made losses, mainly due to the bad decisions of its management. “For example, the CPC gives a commission to the gas station owners. Until mid-2019, CPC paid 2.5 percent of the price of a litre of fuel as a commission. So, for example when a litre of 92 octane petrol was Rs. 117, the gas station owner made a commission of Rs. 2.92. They insisted that the percentage was not enough and in July 2019, and it was increased to 3%.
The CPC also decided to place upper and lower caps because they didn’t want to pay colossal amounts as commissions, in case fuel prices went through the roof,” Jagoda said.
The CPC also decided that for Octane 92 petrol, the upper cap would be Rs. 167 and the lower cap would be Rs. 117 . “So, no matter how much the price increased, the CPC only pays three percent of Rs. 167 as the commission per a litre of 92 Octane petrol. For Octane 95 petrol, the upper cap would be Rs. 184 and the lower cap would be Rs. 128. For auto diesel, the upper cap would be Rs. 121 and the lower cap would be Rs 95. For super diesel, the upper cap would be Rs. 145 and the lower cap would be Rs. 110,” he said.Jagoda said that fuel prices had been revised in December 2021. The price of 92 Octane petrol was increased to Rs. 177 a litre and 95 Octane to Rs. 207 a litre.
“Instead of capping them at 167 and 184, the CPC paid three percent of the new prices as commission to gas station owners. On 18 January 2022, the Deputy General Manager, Finance, figured out something was wrong and wrote to the General Manager asking him what could be done. The General Manager sent a circular to gas stations on 10 March 2022, saying that the CPC had overpaid them and asked the owners to return the amount. Four gas station owners met the Minister in charge, Gamini Lokuge, who insisted that there was no need to pay and buoyed by that gas station owners went to court and got an injunction against the circular,” Jagoda said.
At that time, the CPC was losing Rs. 80 million a day as a result, Jagoda said. Despite that, the CPC lawyers did not appear on the first Court date, and on the second Court date, they agreed to extend the injunction.
“On the third day, the injunction was lifted but the CPC did nothing to collect the money. The problem is many ministers, and senior officials, have gas stations and they profit from this. Still the CPC pays extra to gas station owners. If this is stopped, the CP can reduce the prices of 92 Octane petrol by Rs. 9.17 , 95 Octane petrol by Rs. 12 rupees, auto diesel by Rs. 9.27 rupees, and super diesel by Rs. 10.95. The CPC pays Rs. 67.9 million extra a day to gas stations. If this continues, at the current price, and volume, the CPC will lose 25 billion in the next 12 months,” Jagoda said.
