Adulteration of fuel Fuel stations rule the roost in the absence of quality checks

Only 20% of fuel stations in the country are operating 24 hours a day (PIC AFP)

• However  instead of  the Government  being involved,  crude oil was  imported from  Russia at a higher price with a private company  being involved. According to  Palitha the price of this fuel was similar to the fuel price in Singapore. Against such a  backdrop fuel was imported from Russia through a Singaporean company at a higher price

• Fuel stations attempt to hide fuel stocks in order to capitalise during the next  price revision to  make profits
• Fuel stations not operating for 24 hours were advised to keep stations open through the day- when fuel is available- during this crisis, but they have failed to oblige
• Water is mixed with fuel and the other reasons for the drop in quality is the fuel residues in tanks
• If fuel contains water or residues, engines misfire or break down and the fuel combustion increases
• The use of unclean fuel causes more fuel to combust and thereby increases the fuel consumption
• The fuel agreement on loan basis with India includes a supply of black oils, diesel, petrol and kerosene
• Russia has agreed to supply fuel 30% less than the prevailing price and sans interest for two years

An acute fuel shortage is witnessed all around the country at present. Recently Prime Minister Ranil Wickremasinghe addressing the public said that available petrol stocks would be sufficient only for a day. Minister of Power and Energy Kanchana Wijesekara at one time requested the public- via a Twitter message- to refrain from waiting in queues until diesel is issued again. The public however had to suffer while waiting in long queues while waiting to obtain fuel. 

People complained that despite remaining in queues some fuel station owners did not issue fuel even after the facility having received fuel on time. They also complained that several fuel stations take time to distribute fuel despite receiving new stocks in the night. These accusations were also directed at major fuel stations in Colombo. Accordingly fuel bowsers arrive at stations around 12 am and stocks are unloaded in the morning. These stocks are distributed to the public starting around 11am and 12pm. Therefore people who have remained in queues since 4 am have to wait for around 10-12 hours to obtain fuel. Some even remain in queues for 2-3 days. Fuel stations attempt to hide fuel stocks in order to capitalise during the next price revision to make profits, they added.
Only 20% of fuel stations in the country are operating 24 hours a day. In some areas it’s so hard to find a fuel station that operates for 24 hours. People remain on the roads owing to queues. Fuel stations not operating for 24 hours were advised to keep stations open through the day- when fuel is available- during this crisis, but they have failed to oblige, Ananda Palitha, the Chief Secretary of the Jathika Sevaka Sangamaya of the Ceylon Petroleum Corporation (CPC) said. Palitha confirmed that some fuel station owners hid fuel stocks purchased at old prices in bowsers to sell them at the revised price. The Corporation issuing fuel throughout 24 hours becomes ineffective when fuel stations close at 10 pm. “Some owners advise bowsers to park on the way and to arrive in the morning or some do not unload stocks in bowsers until morning. Some fuel station owners started to carry out several misdeeds. Make it mandatory for all fuel stations to carry out a 24 hour service and then there would be no 

more fuel queues,” Ananda Palitha added.

Some owners advise bowsers to park on the way and to arrive in the morning or some do not unload stocks in bowsers until morning. Some fuel station owners started to carry out several misdeeds. Make it mandatory for all fuel stations to carry out a 24 hour service and then there would be no more fuel queues

Ananda Palitha Chief Secretary Jathika Sevaka Sangamaya of Ceylon Petroleum Corporation (CPC)

Such misdeeds were profoundly practised in fuel stations in remote areas. Closing fuel stations at 10 pm during a fuel crisis makes the operation ineffective. Palitha said that these queues would not exist if the fuel was distributed properly. 

Pumping fuel to vehicles as soon as the content in bowsers are unloaded is not wise. These fuel stocks are not checked for quality. There is a higher possibility for water being present and other minute particles to be mixed with these stocks. “Some fuel should be taken to a transparent bottle before unloading contents in any bowser; for a sample check. This should be done before filling the tanks for the purpose of identifying any substance that’s likely to be mixed with fuel,” explained Palitha.

At present the CPC does not have fuel reserves. Fuel is obtained directly from vessels. There is a rule observed by the CPC when unloading fuel. If the height of the fuel stock is one metre, it is should be allowed to rest for an hour and if it is five metres the rest is for five hours and if ten metres the rest is for ten hours. This is done to let residues in the fuel reside at the bottom. At present fuel is not kept for hours and is distributed as soon as they are unloaded, Palitha affirmed. 

Therefore the quality of fuel has become questionable. Even if the 92 Octane petrol meets the standard on arrival such malpractices make the fuel lose its quality. Water is mixed with fuel and the other reasons for the drop in quality is the fuel residues in tanks. The residues contain several harmful substances. Therefore pumping fuel to vehicles as soon as stocks are unloaded at a station is not suitable. Fuel should be put into a transparent bottle and checked for quality,” Palitha added.

If fuel contains water or residues, engines misfire or break down and the fuel combustion increases. Residues in fuel are minute and not visible. Palitha said that instead of checking for fuel quality some even mix kerosene oil in fuel tanks.

Authorities not  taking responsibility

The CPC should carry out a proper investigation in this regards. “None of the institutions responsible however is carrying out such investigations. No such investigation happens despite the CPC having a raid unit and officers to carry out quality checks. The Consumer Affairs Authority (CAA) and the Police have the right to check fuel quality, but these institutions have failed to take responsibility,” said Palitha.

The use of unclean fuel causes more fuel to combust and thereby increases the fuel consumption. According to Palitha a litre of fuel that could produce a mileage of 10 kilometres is now producing only 6 kilometres. Vehicles were not imported during the last 2-3 years and the 30% fuel requirement of farmers was not fulfilled. In such a backdrop the reason for the higher fuel consumption outweighing the amount imported was due to the increased fuel combustion. “Therefore any type of fuel received by any station should not be used without a check being carried out to determine quality; using a transparent bottle,” Palitha said. 

We presented a paper to the Cabinet to obtain the necessary funds and we will release the stocks once we find funds. That was why we advised the public not to remain in queues for diesel and petrol. This is not something to hide

Kanchana Wijesekara Minister of Power 
and Energy

A petrol shortage emerged in Sri Lanka for the first time. Sri Lanka was to receive fuel stocks worth 500 million US$ and 200 million US$ from Indian vessels. Three weeks before these consignments arrived agreements had been signed regarding the receiving of four vessels containing petrol and diesel worth 200 million US$. These four ships were also from India and they were not allowed to enter the port on the due date. It takes four days for a vessel to reach the country from India. One of the four vessels containing diesel was made to enter the port only after 31 days had passed after its arrival date. A vessel of the Vitol Company containing 37000 MT of Octane 92 and 95 petrol has been at sea since March 28, according to Palitha.

“I suspect that there is fraudulence involved in measures taken to order more fuel vessels while the two vessels containing fuel, which can be purchased free of interest from India, are available. The fuel agreement on loan basis with India includes a supply of black oils, diesel, petrol and kerosene. However all the fuel stocks refered to in the agreement are yet to be imported. 

If measures were taken to immediately import all the fuel stocks from India instead of obtaining fuel from these vessels the foreign reserves saved could have been used for another activity and this would have been a solution to the dollar crisis as well. Now they are trying to release the fuel stocks imported at higher prices. If they are to be released, releasing any of the gas vessels would be unthinkable.

The demurrage charge for these vessels alone is more than 3.5 million US$. The demurrage charge and the price we paid for one fuel barrel exceeds six million US$. Therefore the sum of dollars payable to two gas vessels is to be paid as demurrage for fuel supplying vessels. In that case queues for kerosene, diesel and petrol were created by the authorities.

Agreement with Russia squandered 

We need nine metric tons of diesel per day only to get rid of queues. The amount of diesel in the vessel which arrived recently is only sufficient for four days. In such a situation the minister in charge of the subject asked people to avoid remaining in queues in search of diesel and petrol for three days and two days respectively. This was a decision of an incapable minister. He said 6600 litres of fuel would be supplied to each fuel station and this amount is not sufficient to meet the needs of at least half the number of people in queues. When India attempts to supply fuel, the authorities use the remaining foreign reserves to buy fuel. A maximum of 27 million US$ is needed to purchase a vessel of black oil and kerosene. If a vessel containing black oil was released at first that could have been used for power plants instead of using diesel. The CEB has confirmed that power plants are non-operative without black oil or diesel. The Russian Ambassador, during his discussions with the authorities, pointed out that fuel would be supplied in keeping with agreements between the two countries. However instead of the Government being involved crude oil was imported from Russia at a higher price with a private company being involved. According to Palitha the price of this fuel was similar to the fuel price in Singapore. Russia has agreed to supply fuel 30% less than the prevailing price and sans interest for two years. Against such a backdrop fuel was imported from another Russian company through a Singaporean company at a higher price. 

Those stocks of crude oil is not a variety Sri Lanka uses. There is an alleged fraudulent act involved here. Instead of making payments to release black oil priced 80 rupees for power plants demurrages are being paid. CPC authorities have acted in a manner that has worsen the fuel crisis. They have done so by supplying diesel purchased at 289 rupees to generate electricity. Both the CEB and the CPC incurring losses are unavoidable,” Palitha said.

What Wijesekara said in parliament 

Attempts made to contact Minister Wijesekara proved futile. However speaking at Parliament on May 18 he had said the following: “Auto Diesel and Super Diesel will be distributed to all the fuel stations island-wide on May 18. There are 1190 fuel stations operating and all of them will receive Auto Diesel and Super Diesel in the upcoming weeks. However there is an issue regarding petrol and the available petrol will be sufficient only for a day. There has been a petrol vessel at our sea territory since March 28, but with the prevailing financial crisis in the country there are no dollars to pay for the vessels. We owe 53 million US$ for the same vessel for stocks supplied a few months ago; in January. That sum was to be settled through a letter of credit, but it could not be carried out through the banking system. The vessel company did not agree to release the petrol stocks until the present payments were settled. The Central Bank had assured to pay off previous dues in keeping with a specific payment plan, within 15 days, starting August. The company promised to release the stocks once the payment was made. To this day we are to find funds to settle that sum. We presented a paper to the Cabinet to obtain the necessary funds and we will release the stocks once we find funds. That was why we advised the public not to remain in queues for diesel and petrol. This is not something to hide”.

None of these authorities seem to take up such responsibility at the moment

Thushan Gunawardene Former Executive Director CAA

CPC Chairman W.W. D. Sumith Wijesinghe could not be reached despite several attempts being made by this newspaper. 

A Consumer Affairs Authority spokesperson, speaking of checks conducted on substandard fuel being distributed, said that raids and checks are conducted following complaints received. It’s after using the fuel samples given by the public that the authorities arrive at conclusions regarding the fuel quality. These checks are carried out by Sri Lanka Standards Institution and Sri Lanka Industrial Technology Institute.

Former CAA Executive Director Thushan Gunawardena said that the CAA, Sri Lanka Standards Institution and Sri Lanka Industrial Technology Institute are authorised to check the quality of fuel. “The CPC should also conduct checks on randomly obtained fuel samples and inform people about the quality of the fuel. None of these authorities seem to take up such responsibility at the moment,” Gunawardena added. Attempts made to contact the Chairman of Ceylon Petroleum Storage Terminals Limited Major General M. R. W. de Zoysa proved futile. When a member of its board of directors at Ceylon Petroleum Storage Terminals Limited was contacted he advised to this writer to contact the Chairman and gave the phone number of the personal secretary to the chairman. These attempts also failed to provide any information.

When inquiries were made regarding the delays in distributing fuel after it is unloaded at the station, a private fuel station spokesperson said that fuel should be allowed to rest for a few hours to check for the presence of water and residues and if there is no problem regarding its quality fuel is issued. 
Attempts made to contact Sri Lanka Standards Institute and Sri Lanka Industrial Technology Institute to inquire whether investigations are being carried to check the quality of fuel proved futile.