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CPC earnings: 53% of rupees spent on debt

30 Oct 2022

  • 45% of rupee earnings spent on foreign loans
  • Rs. 65 b paid to Govt. as tax
  • Rs. 1 t incurred in accumulated losses
By Asiri Fernando More than half of the rupee earnings of the Ceylon Petroleum Corporation (CPC) over the first eight months of 2022 have been used to service debt, The Sunday Morning learns.  This is even as the State-owned petroleum supplier has finally managed to make a profit over the last two months, following a fuel price revision. According to the CPC, Rs. 513 billion in earnings over the first eight months of this year were used to settle foreign currency loans, their interest, and short-term rupee loans. The payments amounted to 53% of the total rupee earnings of the CPC during the eight-month period, which was Rs. 956.1 billion. The massive sum needed to service foreign and local loans had constrained the CPC’s ability to utilise more rupees to open Letters of Credit (LCs) needed to import fuel. Earlier this month, The Sunday Morning reported that the CPC had been unable to settle the arrears for two crude oil shipments which the Sapugaskanda Oil Refinery had used up, with another 100,000 MT crude oil shipment awaiting payment offshore. When asked how much the CPC had committed to importing fuel to Sri Lanka, CPC Chairman Mohamed Uvais Mohamed said that the CPC had spent only Rs. 357 billion on purchasing fuel – 37% of the total rupee income of the State institution over the eight-month period. The Treasury cap on energy imports set at a maximum of $ 50 million per week and the CPC’s rupee debt servicing obligations compound the challenge to source both rupees to open LCs and dollars to make payments for fuel consignments. Meanwhile, it is learnt that the CPC had paid the State Rs. 65 billion in taxes over the period. According to sources close to the issue, the CPC had accumulated losses amounting to Rs. 1 trillion from 2007 to August 2022.  


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