Bunkering business should be a state monopoly - CPC unions

by Gamini Warushamana

Ceylon Petroleum Corporation (CPC) trade unions demand a state monopoly in bunkering as a solution to financial difficulties in the CPC and to ease the increasing fuel costs in the country as a result of increasing crude oil prices.

In a letter addressed to President Mahinda Rajapaksa, the Secretary of the Ceylon Petroleum Common Service Union (CPCSU) Siripala Gamage said that the CPC unions had discussed the matter with the Petroleum Resource Development Minister A. H. M. Fowzie several times, but nothing has been done.

There are around 200 ships passing the Sri Lankan shores daily and if we can supply fuel for at least 50 ships it would be a significant gain.

Therefore bunkering is one of the most profitable businesses for the CPC. It was a state monopoly and the CPC did the business well prior to selling the bunkering facility to Lanka Marine Service (LMS) in 2002. Free competition added nothing to the business other than sharing the profitable business, CPCSU spokesman D. J. Rajakaruna told the 'Sunday Observer' .

The CPCSU said that Lanka Indian Oil Company (LIOC) has already started bunkering from Trincomalee and is planning to expand it to Galle and Colombo.

The union opposes this move and stressed that the bunkering business should be a state monopoly. This would be a distinct advantage for the country on account of its geographical location.

We should not let any other country exploit it as this is a business we can do well and did well, Rajakaruna said.

The recent COPE report pointed out that the privatisation of the CPC bunkering business to the LMS is a corrupt deal and the government should terminate the deal and acquire the business, the unions said.

In 1976, CPC had earned 45% of the total crude oil import bill by exporting refined petroleum products. This is the main income source of the CPC that earned money in dollars.

The fuel consumption of the country is increasing and in 2005 the fuel consumption had increased by 10% compared to the previous year. Around 40% of electricity is generated by petroleum.

The local market price of fuel depends on many reasons and the international crude oil price is the main factor.

It contributes 56.9% of the total costs. The depreciation of the Sri Lankan rupee has also pushed up the fuel price in the local market.

The CPCSU said that since the bunkering business nets in dollars it can cushion the international crude price fluctuation and control the pressure on the dollar.

[email protected]