In spite of falling international oil prices during the year 2015, the financial position of Sri Lanka’s state owned fuel retailer, Ceylon Petroleum Corporation (CPC) has weakened, statistics showed.

According to the Central Bank’s Annual Report, the CPC reported a loss of Rs. 18.4 billion in 2015, compared to a marginal profit of Rs. 1.5 billion in 2014, as per the provisional financial statements.

“The main contributory factors for the weakening of the financial position of the CPC included the substantial reduction of domestic petroleum prices at the beginning of the year without a commensurate duty reduction and the depreciation of the rupee during the latter part of the year, which enlarged the CPC’s trade payables and liabilities to the banking sector,” the Central Bank report stated.

It noted that further, the losses include a Rs. 6.2 billion incurred due to exports of excess furnace oil and naphtha, owing to the lower domestic demand for such byproducts of the CPC’s refinery.

“Although there was a notable buildup of the CPC rupee deposits with the banking sector particularly in the first eight months of the year, its total gross liabilities to the banking sector, increased by Rs. 18.9 billion to Rs. 264.5 billion during the year, partly reflecting the impact of the rupee depreciation on the US dollar denominated borrowings of the CPC,” the report added.

According to the Central Bank report, the average international crude oil price (Brent) fell by 46.1 per cent to US dollars 53.75 per barrel in 2015, from US dollars 99.68 per barrel in 2014. Brent crude oil prices fluctuated between US dollars 36-68 per barrel in 2015.

“Broadly following the international price trends, the average price of crude oil imported by the Ceylon Petroleum Corporation (CPC) also declined by 47.6 per cent to US dollars 54.80 per barrel in 2015, from US dollars 104.53 per barrel recorded in 2014. The average import price of total refined petroleum products declined by 38.8 per cent to US dollars 542.61 per MT in 2015 from US dollars 886.26 per MT in 2014,” the report further pointed out.