CoPE uncovers massive fraud of over Rs. 31 b at CPC for extra commissions

• Overpayments result in customers paying extra Rs. 5.85 per litre of petrol 92 Octane, Rs. 7.50 for petrol 95 Octane, Rs. 5.88 for LED, Rs. 6.96 for LSD as of 19 June 2024
• Discloses deliberate delay in issuing circular for filling stations cause over Rs. 3.4 b loss from 2014-2022
• Asserts internal officials of CPC clearly responsible for fraudulent activities
• Demands to know what actions CPC took to address issue so far
• Directs Chief Accounting Officer and Administrative Officer to submit detailed report within 7 working days; including names of individuals 
• Discloses officials responsible for fraud are no longer in Sri Lanka

The Committee on Public Enterprises (CoPE) exposed a massive fraud by the Ceylon Petroleum Corporation (CPC), where the public has borne additional fuel costs due to an overpayment of Rs. 31,021.07 million in extra commissions to its distributors. 

It disclosed that as a result of the overpayments, CPC customers have been paying Rs. 5.85 extra per litre of petrol 92 Octane, Rs. 7.50 extra per litre of petrol 95 Octane, Rs. 5.88 extra for Lanka Energy Diesel (LED), and Rs. 6.96 extra for Lanka Super Diesel (LSD) as of 19 June 2024.

Additionally, the CoPE revealed significant dishonesty within the CPC, citing a deliberate delay in necessary circulars to filling station owners caused a staggering loss of Rs. 3,416 million from 2014 to 2022.

The Committee disclosed a delay of eight years and eight months in issuing the necessary circulars to filling station owners, resulting in a loss to the Marketing Department of the CPC.

The critical issue was brought to light during a recent CoPE meeting convened to examine the Auditor General’s report for 2022 and assess the current status of CPC held on 19 June chaired by MP Rohitha Abeygunawardena. 

The members expressed strong displeasure and insisted on holding the corporation’s officials accountable for the large-scale fraud. 

The CoPE asserted that the internal officials of CPC are clearly responsible for the fraudulent activities and demanded to know what actions the corporation has taken to address the issue so far. 

They directed the Chief Accounting Officer (CAO) and Administrative Officer (AO) to submit a detailed report within seven working days. “This report must include the names of individuals involved in the fraud and the measures taken to hold these officials accountable,” it added.

The committee also questioned the accounting practices regarding the excess commission paid in 2022. This commission had been incorrectly categorised as a sales expenditure rather than a receivable. CoPE inquired about the officials responsible for recovering these overpayments and what actions have been taken in this regard.

It was revealed during the meeting that the officials responsible for the fraud are no longer in the country. COPE directed the CAO and AO to submit a comprehensive report within two weeks. 

“This report should include the names of those involved in the financial fraud and confirm that a complaint has been filed with the Criminal Investigation Department (CID) to initiate a parallel investigation alongside the internal inquiry,” it added.