CPC to raise jet fuel imports to meet soaring local demand

Sri Lanka’s state owned Ceylon Petroleum Corporation (CPC) is devising plans to increase its jet fuel imports in the next two years anticipating a rise in domestic demand of the aviation sector in the next two years, official procurement plan revealed. CPC will increase jet fuel imports by 38.33% to 593440 metric tons next year and in addition 7.4% more to 635820 metric tons in 2022, official data showed.

According to official documents, CPC has no alternative other than to import refined petroleum products to meet the local demand as the production at Sapugaskanda oil refinery is insufficient to tackle the demand, procurement plans unveiled.

The government has to expedite the procurement process of fuel imports as the CPC refinery has to shut down for maintenance once in every two years.

The present production out put at the refinery is around 40,000 b/d which is sufficient to meet 25% to 30% of the domestic demand and the balance will have to be imported, official sources said.

The government has already given the green light for the CPC to resume the long-planned project to expand crude oil processing capacity of its refinery at Sapugaskanda.

The CPC's proposal has received Cabinet approval recently to devise a new feasibility study to determine the scope, technical, operational, and financial feasibility of the planned 100,000-b/d expansion.

It will also focus on several alternative proposals to enhance the refinery’s existing capacity, according to Government Information Department of Government Information.

The sales volume of CPC declined by almost 20% to 3,367 million litres for the first eight months of 2020, compared to 4,211 million litres in the same period of 2019, Treasury reports revealed.

Accordingly, CPC revenue dropped almost by LKR 96 billion while the cost of sales declined by 22% to LKR 311 billion.

In fact, as the CPC’s overall performance is highly linked with the exchange rate fluctuations, coupled with the exchange rate variations, its’ overall loss for the first eight months of 2020 reached LKR 4.4 billion, a report revealed.

As the average crude oil price remained below USD 43 per barrel, the total import cost of the CPC during the first eight months of 2020 declined to around USD 1,126 million it added.