Central Bank Governor Dr. Nandalal Weerasinghe says that even though a price formula has been introduced, the Petroleum Corporation has not collected enough rupees to buy dollars.

The Governor of the Central Bank stated this in a special press conference held today (July 7).

He emphasized that due to the lack of rupees required for the purchase of the next oil tanker, the Petroleum Statutory Corporation is under severe pressure.

The Governor of the Central Bank who also commented there...

“A price formula has been introduced for oil and now it is working. Even with that, still the Ceylon Petroleum Statutory Corporation does not collect the required amount of rupees. Get them the dollars they want. Even if we somehow find dollars, it is difficult to supply dollars at this time. Petroleum has no rupees to buy the dollars found. Not enough. That is the next serious issue. Even when the price has been increased and all the oil has been sold, it is sold for money, then when the amount of rupees needed to buy the next oil ship is gone, now there is a lot of pressure and the CPC is asking for rupees from the treasury. In addition to their daily needs, in addition to income and expenses, CPC demands rupees from the treasury even after increasing the price. It does not belong to the treasury. Then they have no way to give, they say to the central bank, they ask us to mint money, that is the main problem now.

CPC may have some reasons, because the price increase was very late. Then, in addition to the losses that were previously sold, even those that are currently being sold will not get money from them even if they supply oil to the electricity board. CEB is running at a heavy loss. Because the price has not changed. Then even if the CPC sells the oil, it will not get a share. Some are sold to CEB. In addition, there has been a big jam there because of the debt that has to be paid to the banks in some way for the previous losses. Due to not taking those decisions earlier, this has now become a serious situation.

For example, I can say that the CPC is currently asking for 217 billion rupees from the treasury. They are asking for rupees to buy dollars for them, this is not what was in the treasury's cash flow. Then where will the treasury give 200 billion at once. They are asking from the central bank. Then if the central bank decides not to give any more rupees, then the CPC will have no way to buy our dollars even if they have them. This oil-free situation will continue for a long time. So that is the difficult situation. We are now experiencing the most serious consequences of not making any price changes that could have been implemented.

This problem cannot be solved by monetary policy alone, fiscal policy is necessary to solve this situation. Only if everything is implemented as soon as possible, we can get out of here soon. The Prime Minister said that money has to be minted, that is true. If we don't mint money and give money to CPC to buy oil, the whole country will lose oil."