2007 - Ceylon Petroleum Corporation

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Katunayake Aviation Section
Orugodawatta Tank Plant
costs for the farming community. A new
sales outlet in Kandy, which opened in
2006, is now successfully carrying out
marketing activities there.
In 2007, CPC reduced prices on all
its agrochemical products in order to
support the farming community.
These discounted prices had corollary
effects on competitors’ product pricing,
which has resulted in CPC becoming a
market stabiliser.
Training sessions and workshops on
promoting agrochemical products
among the farming community were held
during the year for the Corporation’s
field staff. CPC also targets educational
efforts at the farmers themselves,
with the aim of encouraging them
to purchase the Corporation’s own
agrochemical products.
It is planned to obtain ISO approval for
the Corporation’s Agrochemical Plant
during the coming year.
Aviation Fuel Sales
CPC’s Aviation Sales Unit markets
and supplies fuel to international and
domestic flights and also to military air
bases in Sri Lanka. With over thirty years’
experience in aviation fuel sales, the
Corporation has built a solid reputation
as a reliable supplier.
In the year under review, major aviationfuel
operations were carried out at the
Katunayake and Ratmalana airports and
military installations. However,
the country’s political problems
prevented CPC from handling operational
activities at domestic airports and
military air bases in the North and East.
At present, these activities are being
conducted by the Sri Lanka Air Force (SLAF).
CPC continues to supply fuel, train SLAF
staff and maintain the quality of products
and equipment at airports in the North
and East.
Aviation fuel sales accounted for
9% of CPC’s overall sales in the year
under review. Sales volumes remained
constant, with zero variance between
2006 and 2007. The Corporation made
profits of Rs. 585 Mn from aviation sales
in 2007.
Aviation-fuel handling in Sri Lanka is
currently carried out under a technicalservice
agreement with Chevron Global
Aviation, Dubai. CPC’s Aviation unit
follows Chevron Global Standards; its
operations are in line with the highest
international standards.
Diesel
This product category generated the
largest sales volume in the year under
review, constituting 43% of CPC’s
overall sales. In all, 1,719.73 Mn litres of
diesel were sold in 2007 as compared
to 1,578.37 Mn in 2006. Sales thus rose
by 9%. This increase, which follows
a dip in sales volumes in 2005 and
2006, can be attributed to low rainfall
in 2007, which markedly reduced the
hydroelectric generating capacity on
which the national grid partly relies.
However, since diesel prices are
subsidised, these high sales actually made
a loss of Rs. 1,974 Mn for the Corporation.
Despite the subsidy, it was necessary to
raise domestic diesel prices from
Rs. 60/- to Rs. 75/- per litre over the
course of 2007 in order to cover the
increase in import prices. Diesel prices in
Sri Lanka during 2007 were lower than
in India, Bhutan or the Maldives, though
higher than in Bangladesh and Pakistan.
The breakdown of diesel sales according
to district remained consistent with
previous years. Sales volume was
significantly higher in Colombo than
in any other district, with Gampaha,
Kurunegala, Kandy and Kalutara all
performing well.
Petrol
CPC’s petrol sales trends saw a 4%
increase between 2006 and 2007. 502
Mn litres of petrol were sold in the year
under review, thus accounting for 12%
of CPC’s overall sales by volume. As CPC
ANNUAL REPORT 2007 | CEYLON PETROLEUM CORPORATION