SJB alleges Kanchana did away with 1% royalty on Sinopec, etc., to settle loans, passed debt burden on to consumers

By Shamindra Ferdinando

Samagi Jana Balawegaya (SJB) trade unionist Ananda Palitha yesterday (15) said that Power and Energy Minister Kanchana Wijesekera had abolished a Cabinet decision to impose 1% royalty on a month’s sales imposed on new entrants to the market China’s Sinopec, Australia’s United Petroleum and RM Parks of the USA. That was to be exclusively used to settle what the Ceylon Petroleum Corporation (CPC) owed its creditors, Palitha said.

However, having done away with 1% royalty on a request made by Sinopec, the debt burden had been conveniently passed on to consumers, the former UNP trade union activist said. United Petroleum and RM Parks are yet to launch operations here.

Palitha thanked Minister Wijesekera for publicly acknowledging that consumers of petrol and diesel have been made to pay Rs 50 per litre since the middle of last year to settle what the Ceylon Petroleum Corporation (CPC) owed its creditors.

Minister Wijesekera said this when Chamuditha Samarawickrema raised the issue on the ‘Salakuna’ live political programme on Hiru TV recently.

Palitha said that a litre of petrol 92 cost Rs. 366, Octane 95 Rs. 464, Auto Diesel Rs. 358 and Super Diesel Rs. 475 because the CPC passed its debt on to consumers. A litre of Kerosene is sold at Rs. 236.

Minister Wijesekera owed an explanation why he changed the agreement in favour of the companies, thereby heaping further burden on the hapless public. Responding to another query, the trade union leader emphasized instead of compelling consumers to pay an additional Rs 50 per litre the government should have extended the 1 % royalty to CPC and Lanka IOC as well.

Palitha said that the Wickremesinghe-Rajapaksa government repeatedly assured consumers the entry of new suppliers would pave the way for quality products at an affordable price but the powers that be went to the extent of changing the original agreement to appease the Chinese.

Referring to Minister Wijesekera’s disclosure that USD 5 mn was being paid to Iran as Sri Lanka owed Teheran USD 240 mn for light crude purchases made two decades ago, Palitha said that during President Mahinda Rajapaksa’s tenure the CPC paid USD 35 mn for 90,000 mt of Iranian light crude. Alleging that deal had been conducted under controversial circumstances, at a time Teheran was under Western sanctions, Palitha said that though the payment was made at the time, the country did not receive the promised delivery of crude oil.

Palitha said that Iran never returned that money. Cash-strapped Sri Lanka should take up this issue with Iran, a friendly country always supportive of Sri Lanka, Palitha said, alleging that successive governments never made an attempt to recover USD 35 mn.

The trade union leader pointed out that the CPC should recover as much Rs 169 bn owed by several government institutions instead of fleecing the consumers. Of that amount, national carrier SriLankan alone owed Rs 110 bn in USD terms, Palitha said, urging the Cabinet-of-Ministers and the relevant Parliament watchdog committees to look into the matter.

Several years ago, consumers were made to pay Rs 1 per litre of petrol and diesel to settle CPC’s debt. One billion rupees had been allocated for that purpose regardless of the total amount collected, Palitha said. Now that amount had been raised to Rs 50 per litre of petrol and diesel, he added