CPC to abolish 3% discount for fuel distributors from tomorrow

The Chairman of the Ceylon Petroleum Corporation (CPC), D.J. Rajakaruna, says that the 3% discount currently granted to fuel distributors will be abolished, with a new payment formula set to take effect from tomorrow (01).

Addressing a press briefing today (28), the CPC Chairman claimed that the 3% discount, which has been in place since the circular issued on March 10, 2022, was unlawful.

“These people were entitled to a 3% discount. But it is implemented as per the circular issued on March 10, 2022. According to that, the current amount paid is unlawful. It is clearly stated that if the price of diesel increases beyond Rs. 121, then the corresponding 3% amount is paid. For petrol, it is Rs. 162. If so, those people should get 3.63% as a discount on a liter of petrol. Diesel should get 4.86%, but if they calculate it at 3% last month, they will get Rs. 8.52, petrol 92 will get Rs. 9.14, and petrol 95 and super diesel will get even more,” he explained.

He further elaborated that due to system errors within the CPC, distributors had been receiving more than the intended amount.

“In 2022, the price of oil increased unusually. After that price increase, when calculated at 3%, it went to Rs. 14-15. But according to the 2022 circular, those guys should only get 3% if the price of diesel increases by more than Rs. 121. That was a mistake made by the CPC. If our CPC’s system had been fixed, they would not have received more than 3.63%.”

“Then those people went to court to continue this, and they got an injunction order, and because of that order, the 3% continued to increase. Later, that case was lost. When they tried to implement it again, they went to the Court of Appeal. They got an injunction order, and they got that amount of Rs. 14-15. Later, an audit was conducted in this regard. The audit also revealed that Rs. 35.4 billion had been illegally taken from the people at that time and the distributors had received this, and this needs to be corrected immediately,” he said.

To rectify the situation, CPC has developed a new formula that considers expenses such as electricity, water bills, and operational costs, offering profit shares accordingly.

“Now we have decided to remove this 3% and prepare an equation in relation to the expenses of these guys. We informed the Ministry Secretary about it. The secretary appointed a committee, and the decision taken by that committee is going to be implemented from tomorrow.”

He assured that the new system would be fair and transparent:

“In it, the electricity bill, water bill, and other expenses have been calculated, and an equation has been formulated to provide a fair profit share. That is what is going to be implemented. Now, if the electricity bill or water bill increases, the amount due will be received according to this equation. This is very fair, and there is no problem from the people’s point of view.”