Minister of Petroleum Resources Development Arjuna Ranatunga has given a pay hike to workers in Sri Lanka’s loss-making state-owned fuel refiner and retainer while blaming an ‘oil mafia’ for high costs and supply disruptions.
“An oil mafia is prevailing, today,” he was quoted as saying at a ceremony where a collective agreement for 2018 was signed between the Ceylon Petroleum Corporation and its labour unions.
“I will change the system of receiving income by this oil mafia. For the welfare of this institution, I never allow to grab the public money. I need assistance of workers to do the right thing.”
The statement did not say how much the pay hike was but said it was to remove the pay gap among grades, give a salary increment and increase executive allowances and security allowances in parallel with the salary increment.
The CPC has been making losses as the government has subsidised retail prices of road fuel, keeping them below cost. Sri Lanka has no automatic pricing mechanism for fuel.
A finance ministry report said it made a foreign exchange loss of Rs7.0 billion owing to the depreciation of the rupee in 2017.
CPC has over 2.0 billion US dollars of working capital and legacy loans taken to give off-budget subsidies to customers in the past.