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Wednesday, March 29, 2023

CPC delays fuel to apparel sector despite payment in USD – The Morning

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  • JAAF notes delays in CPC delivery due to low fuel stock
  • Adds, however, that LIOC delivers on time

By Imesh Ranasinghe 

The apparel sector sees delays in fuel deliveries from the Ceylon Petroleum Corporation (CPC), despite paying in dollars,, while small and medium enterprise (SME)-level companies are facing practical issues over requirements to purchase fuel. 

Speaking to The Morning Business, Joint Apparel Association Forum Sri Lanka General Secretary Yohan Lawrence stated that despite these issues with the CPC, the fuel arrangement with the Lanka Indian Oil Company (LIOC) is working quite well, as fuel deliveries are made on time. 

However, he reiterated that the arrangement with the CPC has seen delays in deliveries, due to the CPC’s low stocks of fuel. 

He also noted that there is a practical issue faced by SME companies, as they are required to buy at least 600 litres of fuel from suppliers. 

“They (SMEs) are startled at this condition, because the volume is bigger than they individually want,” he added. 

In April, the Central Bank of Sri Lanka (CBSL) approved a mechanism allowing exporters to pay in US dollars instead of Sri Lankan rupees when securing their diesel requirements from the CPC, LIOC, and the Jaya Container Terminals Ltd. of the Sri Lanka Ports Authority (JCT Oil Bank). 

This was intended to allow the exporters access to uninterrupted energy supply for the production process, and as the country was unable to find the dollars required for the necessary imports. 

The apparel sector mainly uses diesel for transport and electricity generation. Lawrence further said that the petrol shortage in the country has started to impact the sector as well. 

As of April, the apparel and textile sector of Sri Lanka has brought in about $ 1.9 billion in export revenue for 2022, which is about 47% of the export share so far.

Yesterday (18), Minister of Power and Energy Kanchana Wijesekara requested the public to not queue up at filling stations until this weekend, when the situation is expected to be resolved.

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