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Saturday, February 4, 2023

CPC public debt at Rs. 561 bn: CBSL  – The Morning

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  • Debt increases by 62.5% YoY in 2021 

By Imesh Ranasinghe 

Ceylon Petroleum Corporation’s (CPC) public debt has reached Rs. 561.3 billion in 2021 while making an operational loss of Rs. 41.7 billion in the year, Central Bank of Sri Lanka’s annual report for 2021 showed. 

Accordingly, by the end of 2021, the outstanding public guaranteed debt of the CPC witnessed a substantial year-on-year (YoY) increase of 62.5%. Meanwhile, the CPC accounted for 37.3% of public guaranteed debt stock of state-owned business enterprises (SOBEs). 

Out of CPC’s debts, bank borrowings increased by Rs. 123.5 billion in 2021 to Rs 505.3 billion, while trade receivables from public corporations increased to Rs. 161.1 billion in 2021 from Rs. 142.7 billion in 2020, mainly due to the growing liabilities owed by the Ceylon Electricity Board (CEB) and SriLankan Airlines. Trade receivables from the CEB and SriLankan Airlines accounted for around 90.1% of the total trade receivables of the CPC. 

“The depreciation of the rupee against the US dollar resulted in a notable exchange rate variation loss of Rs. 33.2 billion to the CPC during the year, weighing negatively on the overall loss (before taxes), which stood at Rs. 82.2 billion in 2021 in comparison to the profit of Rs. 2.4 billion recorded in the previous year,” the Central Bank report said. 

Meanwhile, deposits with domestic licensed commercial banks increased by Rs. 76.2 billion to Rs. 140.1 billion by end 2021. 

According to CBSL, the reasons for the losses in 2021 by CPC compared to the profits it made in 2020, reflected the impact of delayed and inadequate revision of prices in line with the sharp increase in global crude oil prices. 

“Sales of petroleum products to the major sectors of transport and power generation yielded operational losses, while the aviation and industry sectors generated operating profits in 2021,” CBSL said. 

Last week, Minister of Power and Energy Kanchana Wijesekera said that prior to the price hike on 18 April, the CPC was incurring a loss of Rs. 1,613 million daily through the procurement and sale of fuel, however, he said the CPC is still making losses despite price hikes, as the prices are not still in line with the market reality. 

In the last two months alone, the price of Octane-92 has increased by 90% from Rs. 177 to Rs. 338, while Auto Diesel has increased by 81% from Rs. 159 to Rs. 289.

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