Energy Secretary says LIOC free to adopt commercial pricing; CPC suffers further losses

Conflicting claims regarding Act No 35 of 2002

By Shamindra Ferdinando

Energy Ministry Secretary K. D. R. Olga yesterday (28) said that in terms of the agreement between Sri Lanka and India, Lanka India Oil Company (LIOC) could adopt commercial pricing.

The Ministry Secretary said so when The Island sought her response to several price revisions effeced by the LIOC recently.

LIOC and CPC (Ceypetco) sell a litre of petrol at Rs 303 and Rs 254, respectively. A litre of diesel is sold at Rs 176 at both LIOC and CPC service stations. The Indian enterprise is believed to be considering revising the price of diesel, as well.

SJB trade union spokesman and former CPC employee Ananda Palitha has repeatedly alleged that the LIOC has discouraged customers by maintaining a substantial price difference. Palitha insists that the absence of a pricing mechanism in terms of Act No 35 of 2002 has been to the disadvantage of the CPC. Ananda Palitha has challenged political parties represented in Parliament to explain why the proposed mechanism couldn’t be established over the past 20 years.

The Act, enacted during Ranil Wickremesinghe’s premiership, in 2002, provided for the establishment of the Public Utilities Commission of Sri Lanka to regulate certain public utilities, including petroleum, electricity and water.

However, Energy Secretary Olga emphasised that LIOC enjoyed the freedom to decide on a pricing formula on its own. According to her, the Energy Ministry couldn’t intervene in the LIOC decision-making process. The LIOC entered the local market during Wickremesinghe’s tenure as the Premier in 2003. At the onset of its operation here, the LIOC took over one third of the service stations, belonging to the CPC. Since then, the LIOC has expanded its operations here.

SJB lawmaker Mujibur Rahuman said that in spite of repeated assurances to restore an uninterrupted fuel supply, consumers had been severely inconvenienced. The Colombo District MP pointed out that people had blocked the Colombo-Negombo road at Kapuwatte yesterday (28), asking the government to make fuel freely available. Responding to another query, MP Rahuman said the Presidential Media Division (PMD) and the Energy Ministry had repeatedly promised to normalise the fuel supply, though long queues in Colombo and its suburbs as well as the provinces proved the crisis still prevailed.

Lawmaker Rahuman said that contrary to government claims, countrywide fuel shortages continued with many LIOC and CPC service stations remaining closed. Some issued only petrol.

Referring to a recent media statement issued by the Tourism Ministry regarding efforts made by the relevant authorities to normalise fuel distribution in the Gampaha district, MP Rahuman said those in authority seemed either clueless or utterly irresponsible.

MP Rahuman asked whether the fuel distribution and the power supply had improved after President Gotabaya Rajapaksa brought in Gamini Lokuge in place of Energy Minister Udaya Gammanpila in the first week of March. The situation has deteriorated to such an extent now the government would have to consider extending ongoing power cuts, MP Rahuman said. According to him, the recent declaration made by the Energy Ministry pertaining to a sharp drop in water levels, in all reservoirs, indicated that power cuts could be further extended soon.

MP Rahuman said that the CPC and Laugfs had no alternative but to match the LIOC’s petrol prices soon. The MP pointed out that the CPC always matched the LIOC prices.