Delays in unloading fuel cost state coffers dear: Unionist

Latest payment over USD 1 mn for diesel, petrol carrying ships

Bowser owners call off strike after receiving 30 percent increase

By Shamindra Ferdinando-2022/05/3

The cash-strapped government has to pay over USD 1 mn as demurrage for the delay in unloading two shiploads of diesel and petrol (92 and 95).

Samagi Jana Balavegaya (SJB) trade union convenor Ananda Palitha yesterday (02) said that the government owed an explanation regarding the unbelievable waste of funds at a time the country was seeking IMF’s intervention and assistance from China, India and other major powers.

 Palitha said that two consignments had been supplied by Vitol Asia (Singapore) Pvt. Ltd., in terms of an agreement with the Ceylon Petroleum Corporation (CPC). In late Oct 2021, the CPC awarded contracts to supply diesel and petrol (both 92 and 95) from January 2022 to August 2022 to Vitol Asia (Singapore) Pvt Ltd.

 Responding to questions, Ananda Palitha said that the unloading of the vessel Swarna Pushp carrying diesel began over the weekend, following 31 days at sea, due to Sri Lanka’s failure to make the required payment. For 31 days demurrage could amount to USD 558,000. The final payable amount would be much higher as demurrage was applicable to the unloading period, Palitha said. The oil products tanker is plying under the Indian flag.

According to the SJB activist, another vessel, Torm Adventurer, which arrived on March 28 carrying 38,000 mt of petrol 92 and 95 was yet to begin unloading. Sri Lanka now owed the vessel over USD 600,000 as demurrage fees for 34 days delay in unloading.

Palitha said that everyday an additional USD 18,000 was added to the total amount.

Energy Ministry Secretary K.D.R. Olga and CPC Chairman Sumith Wijesinha were not immediately available for comment.

Palitha said that Parliament should take up the issue.

Palitha emphasised that the CPC should have explored the possibility of bringing in two shipments in terms of the USD 500 mn Indian credit line instead of scheduling supplies from Vitol Asia (Singapore) Pvt. Ltd., if the Treasury was so desperate.

 Commenting on the strike launched by the tanker owners’ association over the last weekend demanding an increase in transport costs taking into consideration increase in the price of spare parts, service charges et al, Palitha said that the new Energy Minister Kanchana Wijesekera instead of initiating a dialogue had simply dismissed the association’s plea.

The association asked for a 60 percent increase though finally the two parties agreed for a 30 per cent increase. The association immediately called off the strike.

Palitha said that the Energy Ministry had given in quickly as it realised contrary to claims of urgent counter measures, the government didn’t have the wherewithal to maintain the distribution network. The trade union activist said that the association members operated 600 bowsers whereas the government didn’t have even 70 bowsers at its disposal.

The strike resulted in serious disruption to fuel supply countrywide as pressure mounted on the government to settle the political crisis.

Prof. Charitha Herath, Chairman of the Committee of Public Enterprises (COPE) assured that his outfit would soon inquire into payment of demurrage fees. Lawmaker Herath gave the assurance when The Island raised the issue with him.