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Local fuel supply agreement: Objection over choosing once-blacklisted company 

31 Oct 2021

  • Company presented lowest bid in tender: CPC 
BY Uwin Lugoda  Trade unions affiliated to the Ceylon Petroleum Corporation (CPC) alleged that the Government’s recent decision to select Vitol Asia (Singapore) Pte. Ltd., which was blacklisted in the past, to supply fuel to the CPC, was a negligent move.  Speaking to The Sunday Morning, Petroleum General Employees Union President Ashoka Ranwala stated that the CPC awarding contracts to a company that was blacklisted in the past for selling low-quality products to Sri Lanka, was a clear sign of negligence in fulfilling an essential public service.  In 2012, the CPC took Vitol Asia off its supplier list, following a spate of vehicles being damaged due to a suspected batch of contaminated fuel. “The CPC has failed in its duty to continuously supply petroleum and crude oil to Sri Lanka because they lack stable agreements and a long-term vision. By signing this new agreement with Vitol, both the CPC and the Government have failed in their public duty to meet consumer demands,” Ranwala claimed.  He stated that the Government was risking the country’s petroleum services by signing an agreement with a company that was blacklisted in the past. He explained that signing an agreement with such a company would jeopardise the CPC and send the message that they were prioritising such agreements over the uninterrupted supply of petroleum and the smooth functioning of the corporation.  “We would like to remind both the Government and the Minister that they are bound to ensure an uninterrupted service to the people, and we see this agreement as a hindrance to that. So, we strongly condemn them for awarding this contract to Vitol,” Ranwala stressed.  He stated that the Petroleum General Employees Union was planning to stage a protest on 3 November, to pressurise the Government into refraining from entering into such unproductive deals. This protest is also aimed at reminding the Government to correct shortcomings within the CPC, which could lead to the streamlining of fuel supply.  In addition, he stated that the picket would also raise awareness on how an uninterrupted supply of petroleum is a national need.  Ranwala stated that to quell the protest, the Government had, in a gazette notification, declared the fuel industry as an essential service, thereby making it an offence for them to join a protest. He argued that if petroleum was an essential service, the Government should also treat it as such and work towards ensuring an uninterrupted service instead of putting it at risk.  “They declare us as essential services, but they, in turn, have to ensure that we can carry out an uninterrupted service. But if their response to our grievances about Sri Lanka’s fuel supply is to put it at risk by signing such agreements with parties with this kind of track record, then they are wilfully putting the reputation and the functionality of the CPC and its workers at risk.”  It was reported that the state-run corporation awarded a long-term contract to import 1,341,000+10/-5% barrels of petrol (92 Unl) and 459,000+10/-5% barrels of petrol (95 Unl) from January 2022 to August 2022, to Vitol on 26 October. The eight-month contract was awarded to the company despite it having been blacklisted thrice in the past.  When questioned as to why Vitol was awarded this contract, CPC Chairman Sumith Wijesinghe stated that the company was selected through the CPC’s normal procedure.  He explained that when the CPC called for tenders, the company participated, and they presented the lowest cost.  “This company was blacklisted long before we came to power. The last time they were blacklisted was in 2014, but Vitol is a global giant, and they came through our normal proceedings, so we see no reason to blacklist them,” he said.


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