AG warns of likely fuel crisis
June 24, 2014

The Auditor General has warned of a possible fuel crisis in the country because of the dilapidated condition of the network of pipelines which are being used by the Ceylon Petroleum Storage Terminals Ltd (CPSTL) to carry refined petroleum products, learns.

The Committee on Public Enterprises (COPE) took up the Auditor General’s report for discussion at its June 20 meeting held in the parliamentary complex.

Refined petroleum products are currently stored in tanks installed at Kolonnawa and Muthurajawela terminals. Imported fuel is discharged from ships, docked in the Colombo Port and carried through the network of pipelines to these terminals.

The Auditor General observed t hat t hese pipelines, installed some 40 to 70 years ago had deteriorated. The normal lifespan of such pipelines is only 25 years. Meanwhile two pipelines had been abandoned because they were beyond repairs. Against such a background the petroleum authorities were bound to face serious difficulties in meeting the increased demand for fuel products in the country with only three pipelines in operations.

“More than two-thirds of imported refined petroleum products are carried through these deteriorated pipelines and the risk of the whole country being paralyzed with a severe fuel crisis cannot be disregarded in the audit,” the Auditor General said in his report.

It said the Muthurajawela terminal is fed through a mid-sea Single Point Buoy Mooring (SPBM) l ocated 7.2 kilometres off the shore. The unavailability of an alternative arrangement to be used in case of an emergency such as rough seas has been highlighted as a matter of concern by the Auditor General.

There is no facility for inter-terminal transfer of fuel from Kolonnawa and Muthurajawela. Twenty seven instances of oil leakages were reported from April to November in 2012.

Meanwhile, operational and financial inefficiencies of CPSTL have cost the country dearly as observed by the Auditor General.

In 2011, CPSTL paid US$550,996 as demurrage to suppliers because of delays in unloading fuel from ships while it paid US$800,714 in 2012 and US$470,439 in 2013.

Source: Daily Mirror - Sri Lanka

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