CPC responsible for petrol shortage: LIOC

Published : 9:12 am  November 8, 2017 | No comments so far |  |  (176) reads | 
  • LIOC offered assistance to CPC in the past to procure emergency shipments  
  • CPC with its 84 per cent market share is responsible for crisis 
  • Allegations that LIOC tried to sell sub-standard Diesel is totally malicious and frivolous  
  • Attempts by some to blame LIOC for causing the shortage are mischievous and factually incorrect
  • It was found that while the parcel met the chemical properties specification, it contained some visible particles

 

 

dfgrdIn the wake of Petroleum Minister Arjuna Ranatunga faulting the LIOC for the current petrol shortage, Lanka Indian Oil Company (LIOC) said yesterday the main reason for the shortage was the delay in the arrival of shipment of petrol ordered by the Ceylon Petroleum Corporation (CPC).  

It said in a statement, “We understand that a CPC petrol parcel, which was scheduled to reach Sri Lanka on November 2, 2017, has been delayed. While we are not aware of the reasons for this delay, such a disruption has led to shortage of petrol across the country, particularly given that CPC caters to 84% of the Sri Lankan market.   
“LIOC has noted that consumers across the country have been facing some shortages of petrol over the past few days. 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.   


“It may be noted that LIOC caters to only 16% of the Sri Lankan market, while the remaining 84% relies on CPC supplies. Thus, large shortages across the country can only be caused by disruption in supplies of CPC. Average daily sales of LIOC is 600 MT of petrol. Against this, as on date, LIOC has a buffer stock of 3,500 MT of petrol at the Common User Facility (CUF), which is managed by Ceylon Petroleum Storage Terminals Limited (CPSTL). It may be noted that LIOC has adequate stocks of diesel at both the Trincomalee terminal and at CUF and normal daily diesel sales of 775 MT is continually happening from all our sheds across the country. It is a total misrepresentation of facts that diesel is not being sold by LIOC sheds.   

 

It may be noted that LIOC caters to only 16% of the Sri Lankan market, while the remaining 84% relies on CPC supplies. Thus, large shortages across the country can only be caused by disruption in supplies of CPC. Average daily sales of LIOC is 600 MT of petrol


“LIOC is a professionally managed subsidiary of Fortune 500 Global company, and plans its product requirement well in advance and maintains necessary stocks. LIOC had procured a shipment (parcel) of 35,000 MT of petrol from the French oil company M/s TOTAL on DAP basis, which arrived in Sri Lanka on October 16, 2017. As per routine procedure, the petrol was tested by CPC/CPSTL laboratory before being accepted by LIOC. It was found that while the parcel met the chemical properties specification, it contained some visible particles. CPC/CPSTL laboratory as well as LIOC refused to accept the parcel. LIOC maintains its own high quality standards, which it does not compromise at any cost.  “LIOC immediately informed M/s TOTAL to replace the parcel. It may be noted that ownership of the product remains with M/s TOTAL till it satisfies the requirements of LIOC and CPC/CPSTL laboratory. 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.   


“As replacement cargo would have taken at least 25-30 days, M/s TOTAL offered to remove the particles through a filtration process, which is a common industry practice, in order to enable expedited delivery by 3-4 November 2017 to manage the present crisis. For reasons unknown to us, this proposal was not acceptable to CPC officials. Hence, LIOC asked M/s TOTAL to replace the parcel completely. Allegations that LIOC pressurised the CPC to accept the original parcel without correction are totally false.”   

 


As replacement cargo would have taken at least 25-30 days, M/s TOTAL offered to remove the particles through a filtration process, which is a common industry practice, in order to enable expedited delivery by 3-4 November 2017 to manage the present crisis. For reasons unknown to us, this proposal was not acceptable to CPC officials. Hence, LIOC asked M/s TOTAL to replace the parcel completely. Allegations that LIOC pressurised the CPC to accept the original parcel without correction are totally false