CPC to pay commission only on cap prices

Monday, 25 July 2022 00:54 - - {{hitsCtrl.values.hits}}

Move to save Rs. 50 m daily and enable CPC to recover Rs. 4.3 b in overpaid commission

The Ceylon Petroleum Corporation (CPC) will reinstate its 2018 policy of paying commission to Corporation Owned (CoDo) and Dealer Owned (DoDo) dealers only on cap prices of Rs. 162 per litre on Petrol 92 with immediate effect. A senior official told the Daily FT stated that CPC has been paying commission of 2.75% to CoDO and 3% to DoDo on full – per litre cost, respectively, rather than just paying the commission on the fixed upper-limit cap price of Rs. 162, which was established in 2018 by then Finance Minister Mangala Samaraweera.

The official explained that, according to the agreement, CPC is required only to pay Rs. 4.86 commission per litre for 3% of the cap price of Rs. 162 regardless of any price hike.

But due to the abolishment of this policy, the CPC had to pay a 3% commission on the entire cost per litre.

“For instance, when Petrol 92 was priced at Rs. 470 per litre, CPC paid Rs. 14.10 in commission per litre whereas, according to the fixed upper limit cap price, it should have only been Rs. 4.86. With the new court ruling, CPC will only pay commission to dealers at the cap price of Rs. 162,” the official said.

Commenting further, the official also said that the court had also granted the approval to claim the overpaid commissions from all its dealers in Sri Lanka.

“With this court order, we will be able to recover Rs. 4.3 billion from roughly 700 fuel stations and save a minimum of Rs. 50 million on a daily basis. This is a significant accomplishment for us because now we can reduce fuel prices by approximately 8 rupees per litre,” the official added.

Last week, the CPC reduced the fuel prices accordingly. The new prices are as follows; Petrol 92 Octane – Rs. 450; Petrol 95 Octane – Rs. 540; Diesel – Rs. 440 and Super Diesel – Rs. 510.

Additionally, the CPC has urged customers to use the recently introduced fuel pass system, which involves registering a vehicle and receiving a QR code, in order to avoid waiting in line at gas stations.