Saturday November 25, 2017


Sri Lanka IOC unit rejects allegations on petrol crisis

Nov 07, 2017 07:13 AM GMT+0530 | 0 Comment(s)

ECONOMYNEXT - Lanka IOC, a unit of Indian Oil Corporation has rejected allegations that it was to blame for a petrol crisis in Sri Lanka saying it only had a 16 percent share of the market, and it had a buffer stock despite a shipment being rejected.

"It may be noted that LIOC caters to only 16 percent of the Sri Lankan market, while the remaining 84 percent relies on CPC supplies," the firm said.

"Thus, large shortages across the country can only be caused by disruption in supplies of CPC."

"As a reliable distributor of petroleum products in Sri Lanka over many years, LIOC is making all efforts to assist in the early resolution of this problem.

"However, attempts by some to blame LIOC for causing the shortage are mischievous and factually incorrect, and we categorically reject such allegations."

LIOC said it had a 3,500 metric tonne of buffer stock of petrol at the common user facility, Ceylon Petroleum Storage Terminals Ltd (CPSTL) and daily use was only 600 metric tonnes.

LIOC said it had bought a 35,000 MT parcel of petrol from Total, a French energy firm, which arrived in Sri Lanka on October 16. The parcel was tested by a lab at Ceylon Petroleum Corporation and CPSTL and it had had visible particles.

LIOC had had asked Total to replace the cargo.

"Once a parcel is rejected, LIOC has no further role thereafter and it is the seller's own sole discretion/responsibility to decide when to take out the vessel from Sri Lankan waters," LIOC said.

As a replacement cargo would take at least 25 days, Total had offered to filter the particles to and deliver fuel by 3-4 November. LIOC claims that it is common industry practice.

"For reasons unknown to us, this proposal was not acceptable to CPC officials," LIOC said.

CPC officials had said filtering through a ship-to-ship transfer was against standard procedure."

At the moment Sri Lanka does not have an independent petroleum regulator to make decisions.

LIOC said also denied that a second stock of fuel which was included diesel that was rejected was "substandard".

"Infact the diesel proposed to be imported was of much better quality as per international standards," LIOC claimed.

"However, since the country is still having old specifications for diesel, CPC informed that they demand Sri Lankan specifications irrespective the quality of diesel and accordingly, LIOC decided not to procure.

"Infact the diesel proposed to be imported was of much better quality as per international standards," LIOC claimed.

"However, since the country is still having old specifications for diesel, CPC informed that they demand Sri Lankan specifications irrespective the quality of diesel and accordingly, LIOC decided not to procure."

LIOC did not disclose the specification that was not met.

But LIOC has protested the rejection of diesel on the basis of colour earlier. In 2013 a controversy arose over the rejection of diesel on colour, despite having a higher Decane (C10) count which it said was closer to super diesel.

LIOC said in the current crisis it had ordered a separate emergency parcel of petrol, pending the replacement of the original rejected cargo by Total.

It would reach Sri Lanka by November 10.

"It may be recalled that on various occasions in the past, LIOC has offered all its assistance to CPC to procure emergency shipments of petroleum products, and will continue to do so," the firm said.

LIOC said it had also kept customers supplied with fuel from Trincomallee when CPC staff went on strike, by "working around the clock." (Colombo/Nov07/2017)