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| Sunday, 8 May 2005 |
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CPC to set up service stations islandwide by 2007 by Hiran H. Senewiratne The Ceylon Petroleum Corporation (CPC) would have recorded a Rs 4 billion profit if it received a Rs 14.5 billion subsidy from the government last year, its Chairman Jaliya Medagama said. He said that in September last year the government set off Rs 8 billion of the subsidy and the CPC is now in the process of negotiating with the government to obtain the remaining amount to recover the loss. Medagama said that the need of the hour is to implement the pricing formula on price revisions in accordance with international price fluctuations. The CPC recorded heavy loses from January to April this year following the rapid increase in world market prices and this caused a Rs 4 billion loss to the CPC, he said. Medagama said that the petroleum price revision last week could help recover 10 per cent of its losses. The government increased the price of petrol by Rs 6 for a litre, Diesel by Rs 4 and Kerosene by Rs 3. He said that this price formula was passed in Parliament in 2002 but the government did not allow the CPC to implement it.If this formula was implemented it would not have affected consumers in the long run, he said. Deputy General Manager Planning and Development Ranjith Wickramasinghe said that the CPC is planning to set up new service stations islandwide to expand its services after 2007. The CPC cannot move forward with its plan because it had signed an agreement with the Indian Oil Company (IOC) to prevent both parties to acquire or establish service stations until January 2007. The CPC sold 100 of its service stations to IOC. He said that at present the CPC is in the process of looking for strategic locations for outright purchase and long-term leases to set up the stations. Wickramasinghe said that the CPC has no idea of disposing its existing service stations to any company. "Once the market opens in 2007 the CPC could compete with anybody," he said. The CPC hopes to invest heavily on this project and it is estimated that it would cost approximately between Rs 6million -20 million to construct service stations. |
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