Sri Lanka’s state-run Ceylon Petroleum Corporation (CPC) has reported a steep decline in profits for the first half of 2024, with net earnings plummeting by 70.2% to 20.7 billion rupees compared to 69.5 billion rupees in the same period last year. According to a Finance Ministry report, the decrease in profits is attributed to a 20.1% drop in revenues, which fell to 544.3 billion rupees from 681.5 billion rupees a year earlier.
The CPC’s total oil import costs decreased to 1,235 million US dollars, down from 1,380 million dollars in 2023, as the volume of imports declined due to increased competition from new market entrants, despite rising oil prices. While the cost of sales saw a slower reduction of 17.2%, falling to 467.7 billion rupees from 564.6 billion rupees, the overall financial performance has suffered.
Notably, the CPC has eliminated its debt to People’s Bank and Bank of Ceylon, following a government intervention that involved taking over CPC’s debt from state banks. This restructuring was a response to the significant dollar debt incurred during previous currency crises, when the CPC utilized supplier credit to manage forex shortages exacerbated by inflationary monetary policies.
Additionally, the CPC’s outstanding debt to the National Iranian Oil Company has decreased from 230.9 million dollars to 191 million dollars by June 2024, reflecting ongoing efforts to stabilize the company’s finances after years of economic turmoil.
Since the latter part of 2022, Sri Lanka’s central bank has implemented measures to maintain monetary stability, facilitating smoother operations for state energy enterprises and partially offsetting the impact of global oil price increases.