CPC Report Leaves More Questions Than Answers

By Dinouk Colombage

The interim report produced by a three-member panel to investigate allegations that diesel supplied by the Vitol Group was contaminated has proven inconclusive, according to Susil Premajayantha, Minister of Petroleum Industries.
The final report on these allegations was to be handed over last week to the Ministry. However, insufficient evidence has only led to the submission of an interim report which called for further investigation. It is unknown when this final report will be available.
Premajayantha said that further testing is required of the diesel samples before it can be established whether or not the diesel is contaminated. “We have sent samples of the fuel to Singapore for further testing. When those results return we will be able to say what was wrong with the fuel. The interim report has found that there were problems with our filters during testing and we are currently replacing those filters.”
He explained that the laboratories which tested the fuel were out of date. “Our testing specifications do not match European specifications. We are now taking steps to rectify this issue; we will be upgrading our testing standards.”
The minister added that this did not mean the rest of the fuel consignment in the country had also been poorly cleared. “We are now carrying out two separate tests on all of our fuel in storage before it is released for distribution to the public. If there was any distribution of contaminated fuel there would be more complaints, we have received a hundred written complaints regarding the issues with the diesel and these have come from government establishments,” he said.
Controversy also surrounds the acceptance of a shipment of high and low sulphur fuel amounting to 20,000 tonnes each from Vitol. Premajayantha explained that the contract had been signed prior to the problems with the diesel and a letter of credit had already been opened. “Once a letter of credit is opened with a supplier we cannot cancel the order, otherwise the supplier would take legal action against us,” he said.
Premajayantha said that the supply had been properly tested, and if any irregularities had turned up in those tests they would not have accepted it. “The sulphur fuel is used in the power plants around the country. If we could not accept this fuel we would not be able to operate the power plants. We managed to avert that issue by accepting the shipment,” he said.
However, 70,000 barrels of 0.25 percent sulphur gasoil and 240,000 barrels of 90-octane gasoline which was to be supplied by Vitol have been cancelled by the CPC. “We had not opened a letter of credit with the supplier over this shipment and was entitled to cancel it,” Premajayantha said.
He refused to comment on this cancellation, saying that until a final report was submitted they would not comment on the Vitol Group.
He also refused to comment on why Vitol’s bid for the tender for 310,000 barrels of gasoil and gasoline was not accepted despite being a million dollars cheaper than that of the Emirates National Oil Company (ENOC). ENOC was accused last year of supplying sub-standard petrol to the CPC which resulted in the breakdown of over 20,000 vehicles.
S. Ganegoda, spokesperson for the CPC, said that Vitol had been removed from the list of suppliers for the CPC, but could not confirm whether Vitol had been informed. He refused to comment on the state of the CPC testing facilities saying that a statement would be released once the final report was completed. He also declined comment on the tender process for 310,000 barrels of gasoil and gasoline.