Petrol in the buzz, again | Sunday Observer

Petrol in the buzz, again

Due to this rumor of a price increase, the people in Kandy started pumping extra petrol Ministry of Petroleum Resources Development, Secretary, Upali Marasinghe

Two weeks after the crippling petrol shortage witnessed by Sri Lankans, the speculation of a petrol shortage raised its nefarious head once again, in Kandy. However, this time it failed to wreak havoc nationwide, due to the quick response by the authorities who claimed the speculations to be false.

Now, questions remain as to the origin of these speculations, both, the SMS informing of an impending petrol strike which contributed to the further depletion of petrol stocks during the recent crisis, and the speculations which originated in Kandy.

Origin of the speculations

According to the Ministry of Petroleum Resources Development, Secretary, Upali Marasinghe, the origin of the rumors still remain uncertain. “There is a possibility that rumours were started by persons with no political agenda. Then again, these may have been started on purpose by persons with ulterior motives,” he said.

Speaking on the recent speculations of petrol shortage which originated in Kandy, he said, petrol stocks had been over in a filling station in the Kandy area. “Upon discovering this, those who came to buy petrol had gone to the next filling station. This rumor spread and someone sent an SMS.

By Sunday night, the speculations reached even Colombo. However, we managed to issue a media statement and the situation was controlled by Monday. Also, we dispatched bowsers carrying an extra supply to Kandy,” Marasinghe said.

Former CPC Chairman and Managing Director, T. G. Jayasinghe said, there was a rumor spread in Kandy, saying that petrol prices are about to hike. “An acquaintance from Kandy called me to check the accuracy of this. I told them that it’s false,” Jayasinghe said. He said, due to this rumor of a price increase, the people in Kandy started pumping extra petrol and the Kandy depot had to issue extra petrol to fuel stations.

“In other areas, the message spread as ‘a petrol shortage’. These rumors have been spread by somebody, on purpose,” he said.

Jayasinghe added that unless the storage of petrol is managed, these shortage issues will surface from time to time. “The current capacity is not adequate to meet the demand,” he said.

How to manage capacity vs demand

Jayasinghe said, in order to manage an adequate storage capacity, it is important to step up tank capacity. “Acquiring about 10 to 15 tanks from China Bay is crucial,” he said. Jayasinghe denied reports that the China Bay tanks are in a dilapidated condition. “These tanks are in very good condition, they are made with metal, one and a half inches thick. Some have an outer covering of concrete. However, the pipeline linking the tanks was removed during the insurgency period,” he said. China Bay oil tanks are currently entrusted to Lanka IOC (LIOC) by the Government, since 2003.

Jayasinghe added that in order to manage the demand, it is important to refurbish the Sapugaskanda Refinery, which currently produces only 45,000 metric tons, which is slightly lower than its capacity of 50,000 metric tons. “ Last year, there was a proposal to build another refinery in Sapugaskanda, with a capacity of 50,000 metric tons, a Rs. 2 billion worth project. This would have been adequate to supply the country’s demand. We managed to acquire a 25 hectare land for the project. However, we did not receive enough support from the former Finance Minister to proceed with the project,” he said. Marasinghe said, the Ministry had initiated certain processes to manage the demand, long before the fuel crisis struck.

“There is a project initiated to modify the refinery, to enable the chemical process of converting naphtha into petroleum. This would increase the supply of petroleum available,” he said. He added that the Sapugaskanda Refinery was initially built to suit crude oil from Iran, and naphtha needs a higher conversion rate. On Wednesday(22), the Cabinet awarded a contract to Indo East Engineering and Construction (Lanka) Pvt Ltd, to build a storage tank with a 15,000 cubic metre capacity, at the Kolonnawa terminal. The tank is adequate to hold a storage sufficient for 30 days. “ These processes were initiated months ago,” said Marasinghe, adding that the current storage capacity of Ceylon Petroleum Corporation (CPC) is 90,000 metric tons.

Speaking on China Bay oil tanks, he said that CPC alone cannot intervene on China Bay, since it was via a Government level agreement that these tanks were leased out to LIOC.

“We requested a few tanks to be renovated to be utilized by CPC. There were discussions by the Government on the CPC utilizing these tanks, but there has been no response yet,” he said.

Ceylon Petroleum Storage Terminals Limited (CPSTL), Managing Director, Sanjeewa Wijeratne said, they have already repaired a tank with a 15,000 metric ton capacity, which was destroyed by terrorists, in order to expand storage.

Wijeratne said, the current daily distribution is approximately 2,600 metric tons of 92 Octane and 450 to 5,000 metric tons of 95 Octane. The daily diesel requirement is approximately 5,000 metric tons. He added that the total number of petrol bowsers owned by CPC and private parties is around 1,200.

Ongoing investigations

Marasinghe said, the investigation on the SMS, which contributed to the fuel crisis has been handed over to the Criminal Investigation Department (CID). He added that the Ministry has informed Government Agents via letters, to report on respective fuel stations that refused to issue diesel during the crisis. “The letter was issued last Friday, and by next Monday we should receive the information and we will then take action against the fuel stations, accordingly.”

“ CID is currently conducting investigations into the SMS and other social media posts that contributed to the fuel crisis. The outcomes will only be revealed after the investigations are concluded,” said Police Media Spokesperson, Superintendent of Police, Ruwan Gunasekara, when contacted.

Measures to counter pilfering

Speaking of the rackets involved in pilfering oil during distribution, Wijeratne added that there is a proposal to allocate funds from the 2018 Budget, to implement a GPS tracking system. “This system will track bowsers from the terminal to the location. If a bowser deviates from the recommended route, it can be identified and investigated,” he said. 

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