Indian CEO Forum comments on petroleum supply disruption

The Indian CEO Forum of Sri Lanka, the preeminent body for Indian business representation, weighed in on the fuel shortage situation with a statement clarifying the role of Lanka IOC in the ongoing controversy. 

The statement was released by its current president, Umesh Gautam, who also serves as the CEO of Lanka Ashok Leyland Plc and Deputy Chairman of SMB Leasing Plc. The following is the full statement.

As the island-wide petrol shortage continues to inconvenience motorists, the need for answers and accountability is important. However, the rush to judgment and the need to apportion blame has resulted in several allegations and misrepresentations which require some clarification, particularly involving Lanka IOC as a founding member of the Indian CEO forum and one of Sri Lanka’s pioneer strategic foreign direct investments. 

Lanka IOC is a subsidiary of the Indian Oil Corporation, a Fortune Global 500 company with a turnover of over $ 55 bn, and shares many of their corporate governance, processes and standards with regard to procurement, quality assurance, transparency and accountability. 

Therefore one particular allegation pertaining to the import of substandard diesel is unequivocally false as the company adheres to a higher international standard for diesel than what Sri Lankan specifications demand.

There is a fundamental misrepresentation in a lot of the reporting which highlights Lanka IOC’s shipment of petrol on 16 October as the genesis of the crisis. Lanka IOC has a market share of around 16%, and its business activities relating to the import of petrol is to facilitate and cater to its demand, not the entire Sri Lankan market. In the event the petrol shipment is rejected, Lanka IOC maintains a buffer stock to ensure there is no supply disruption to its filling stations as is normal operating procedures. 

With regard to the shipment on 16 October, Lanka IOC would like to make clear that Lanka IOC does not gain ownership of the petrol shipment until it passes CPC/CPSTL laboratory testing. After the lab rejected the petrol parcel, the supplier offered to remove the impurities through a filtration process, pushing the delivery to 3 or 4 November, which the CPC officials rejected. 

Lanka IOC requested a replacement shipment (expected 25-30 days) and thereafter had no role with the rejected petrol parcel. Any allegations associating Lanka IOC with the petrol parcel once rejected are unfounded. 

As a key stakeholder and partner in the Sri Lankan petroleum market, Lanka IOC has come forward on several occasions to offer assistance to CPC whenever the need has arisen and is fully committed to do so again. The company has immediately procured an emergency delivery, expected to arrive on 10 November, in addition to the replacement delivery by M/s TOTAL.

In making these clarifications, Gautam, President of the Indian CEO Forum and Lanka IOC, takes its reputation and responsibility as a leading corporate entity in Sri Lanka very seriously and is a cornerstone of its business practices.