Indo-Lanka refinery agreement fuels CPC strike threat

Ceylon Petroleum Corporation (CPC) workers will next week launch a strike over a proposed agreement to be signed with India regarding investment in an oil refinery.

The move comes after President Maithripala Sirisena turned down a request by the Petroleum Joint Union Alliance for a meeting to discuss the issue. The meeting was sought through Minister of Petroleum Resources Chandima Weerakkody.

Convener of the Union, Rajakaruna told the Sunday Times they will initially withdraw from distributing fuel to sheds and, if they do not get a response, they will withdraw from services at the refinery. "It will have an impact on the Ceylon Electricity Board (CEB) and the aviation industry," he added.

“We are calling to stop the signing of the agreement, as it will have an impact on the industry, as well as the country,” he said.

Sri Lanka and India are expected to sign an agreement to jointly invest and develop the Trincomalee Port and establish a petroleum refinery and other industries there.

The Unions, however, claim the agreement would benefit the Lanka Indian Oil Company (LIOC) and cause further financial losses to the CPC, which is already in colossal debt. Mr. Rajakaruna said the agreement would allow the LIOC to expand in the country.

“The CPC is already Rs 52 billion in debt and, if this agreement is signed, we will never be able to recover," Mr Rajakaruna warned.

He stressed that, the storage tanks in Kolonnawa had capacity for only 400,000 metric tonnes of fuel. By contrast, the 99 tanks in Trincomalee can hold up to 1 million metric tonnes of oil. However, the LIOC uses only a fraction of the tanks, with the vast majority in disuse, he pointed out. “We suffer an annual loss of Rs 900 million due to this reason alone,” Mr Rajakaruna added.