CPC incurs Rs.26,620mn loss from importing inferior crude oil!

The Ceylon Petroleum Corporation (CPC) has incurred a loss of USD 73 million (Rs.26,620 million) by ordering five Russian crude oil vessels as emergency purchases through intermediary companies.

It was reported that the pipeline system of the Sapugaskanda Oil Refinery as well as the health of its workers have been threatened due to inferior crude oil contained in these ships, which have been ordered from April 2022.

When ‘Murban’ crude oil which is more suitable and can be bought in the world market at a reasonable price was available, the CPC officials have ordered several crude oils including ‘Siberian Light’ and ‘Ural’ which are of lower quality.

While the world market price of Siberian Light crude oil is around USD 72 per barrel, the fuel has been bought at a price of more than USD 103 per barrel.

One ship carrying such fuel contains about 700,000 barrels of crude oil, and it is said that the overpaid price for one ship is about USD 14 million.

Dubai-based Coral Energy Company had acted as the intermediary in the purchase of these crude oil shipments.

Two out of the five ships carrying these Russian fuels have not arrived in Sri Lanka till now.

Meanwhile, it was reported that due to the low quality crude oil called ‘Ural’ which has high levels of sulphur, the machinery and pipe system of the refinery as well as the safety of the workers are at risk.

It was also said that inferior crude oil can largely produce naphthalene and kerosene only.

As a result, the production of diesel, petrol and LP gas etc. has gone down increasing the losses.

However, the supply of Iranian, Iraqi and Saudi crude oil suitable for the country’s refinery has been suspended due to the complications in relations with these countries.

Source – Aruna

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