Mar 19, Colombo: The Petroleum Industries Ministry in Sri Lanka said the state-owned fuel distributor, Ceylon Petroleum Corporation (CPC) has obtained Rs. 631 billion worth of loans during the period of June 2011 and December 2012.
Petroleum Industries Minister Anura Priyadarshana Yapa has told parliament that the loans were taken to ensure an uninterrupted fuel supply to the country.
The Minister made this comment in response to a question raised by the Janatha Vimukthi Peramuna (JVP) parliamentarian, Anura Kumara Dissanayake.
Yapa said the loans were obtained from the two state banks, Bank of Ceylon and the Peoples Bank, in addition to National Iranian Oil Company, which extended a credit facility in 2011.
The Minister said that Rs. 35 billion was paid as interest to these loans.
Dissanayake however charged that the CPC was unable to record profits like its competitor, the Lanka Indian Oil Company (LIOC), due to the politicization of the institution.
"The CPC is nothing more than a public burden and is fully dependent on the two state banks," he said.
The CPC has been running at a loss for years and the petroleum authority says it incurs heavy losses due to selling fuel at a loss to the transportation sector and supplying fuel for credit to the electricity supplier Ceylon Electricity Board (CEB) for power generation at a well below cost.