The importation and distribution of petroleum products for all purposes

This has reference to your news item appearing in page 14 of the Daily FT of 29 July 2011 with regard to the Cabinet decision to appoint a Cabinet Sub-Committee to “oversee fuel imports and distribution” in the country.

This is an acknowledgment by the Government that it has now realised that the current management of the Ceylon Petroleum Corporation (CPC) headed by Deshamanya Don Harold Stassen Jayawardena (aka Harry Jayawardena) is primarily responsible for the chaotic situation that was recently created in the country by the wilful importation of an off-specification (sub-standard) consignment of Gasoline 92UNL (Petrol 90) and distribution of such petrol amongst the un-suspecting dealers and the motorists, resulting in several thousands of motor vehicles being stalled on the highways and marring the prestigious image of CPC nationally and internationally, whilst also causing enormous financial loss to the CPC in particular and the country as a whole.

“Overseeing the fuel imports to the country and distribution of the fuel in the country” by a Cabinet Sub Committee can be construed as generally supervising the fuel imports to the country and the distribution of fuel in the country by the concerned Cabinet Sub Committee.

In that context it is relevant to note Section 15 of CPC Act No. 28 of 1961, which clearly states that: “The general supervision, control and administration of the affairs and business of the Corporation shall be vested in the Board of Directors of the Corporation.”

Hence it is obvious that the said Cabinet Decision is in conflict with the provisions of the CPC Act No.28 of 1961. Whether the provisions of the CPC Act No.28 of 1961 prevails over the said Cabinet Decision or the said Cabinet Decision prevails over the provisions of the CPC Act No.28 of 1961 depends on the interpretation of a competent authority.

However, Section 76 of the CPC Act No.28 of 1961 states: “The provisions of this Act shall have effect notwithstanding anything contained in any other written law, and accordingly in the event of any conflict or inconsistency between the provisions of this Act and such other law, the provisions of this Act shall prevail.”

Be that as it may, too many cooks may spoil the soup.

By the appointment of the aforesaid Cabinet Sub Committee to “oversee fuel imports and distribution” in the country, the Government is pointing the accusing finger at the incumbent management of the CPC for the aforesaid disastrous episode, the manner of which the CPC had never experienced during its 50-year-old history.

From all available relevant evidence, documentary and/or otherwise, it can be proved beyond any reasonable doubt that the incumbent management of CPC had accepted and confirmed an offer from a Singapore based Private Limited Company to purchase the off-specification consignment of Gasoline 92UNL at issue and had accepted that consignment of Gasoline 92UNL on arrival in Colombo, notwithstanding the fact that the non conformity of that product with the relevant CPC standard specifications had been brought to the notice of the management by the concerned officials.

The incumbent Chairman/Managing Director, the Chief Executive Officer of the CPC, had been in Sri Lanka when the aforesaid offer of the Singapore based private company had been confirmed and accepted by CPC and therefore he will have to accept responsibility for the import of the off-specification (sub standard) petrol to the country, which caused disastrous results to the CPC as well as the Government.

In these circumstances, it is pertinent to ascertain whether the Minister in charge of Petroleum Industries during the material period had complied with Section 8 of the CPC Act No.28 of 1961 in appointing the present members to the Board of Directors of the Ceylon Petroleum Corporation.

Had the Minister taken sufficient care to ensure that the appointment of the said members to the Board of Directors was in full compliance with Section 8 of the CPC Act No.28, the motoring public as well as the CPC would not have experienced such a disastrous situation as they experienced recently as a result of the wilful importation of an off-specification (sub-standard) consignment of Gasoline 92UNL (Petrol 90) to the country by the incumbent management of the CPC.

In the circumstances the solution to the problem is not the appointment of a Cabinet Sub Committee, but the removal of square pegs from round holes.

S. Talpahewa

A former employee as well as a former Chairman and Managing Director of CPC.