Sri Lanka delists Vitol; claims shipment of diesel fuel damaged vehicles

Sri Lanka’s state-owned Ceylon Petroleum Corporation (CPC) removed Vitol, one of the world’s largest oil trading firm, from its suppliers’ list after its Petroleum Minister Susil Premajayantha announced that some 150 vehicles were affected by diesel fuel supplied by Vitol. Most of the vehicles were state-owned, though the local media reported that 15 train engines had also been damaged. Vitol said the cargo was inspected by CPC inspectors in accordance with international standards. The ministry appointed a three-member panel to investigate the matter before delisting Vitol. Vitol Group of Companies strongly rejected the allegations and in a statement declared, “Contamination could have occurred at any of a number of points between the terminal and the end consumers. We assume the investigation taking place will test every possible point of contamination to avoid further problems.” Vitol insisted that there were no evidence linking the cargo supplied by Vitol with the reported damages to the engines. “The cargo supplied by Vitol came from a larger parcel of cargo which has been supplied to a number of Vitol’s customers in the region, where it has been consumed without incident and found to be fully on specification,” the company explained. The company sent an independent and respected expert to Sri Lanka to assist in the investigation. CPC had previously banned the Switzerland-based firm’s Vitol Asia Pte. Ltd. Singapore, alleging that it had supplied CPC with fuel cargo that was contaminated with lubricating oil. CPC lifted the two-year ban last October 2011. Sri Lanka’s opposition parties and powerful trade unions have blamed the government for the damages done by the alleged contaminated diesel fuel. A similar incident occurred in July 2011, when motorists claimed that petrol supplied by Dubai-based Emirates National Oil Company (ENOC) damaged their vehicles and the government refused to pay for a 20,000 metric ton consignment of gasoline. (August 5, 2012)