CPC takes back denial, admits to paying record sums for oil

A staggering $286 was paid for a single barrel of refined oil by Sri Lanka's state energy company. This confirmation came from Ceylon Petroleum Corporation (CPC) Chairman D.J. Rajakaruna during a press conference in Colombo today, validating claims initially brought forward by HSBC Group Chief Executive Officer Georges Elhedery at an investment summit in Hong Kong.

Global oil prices remained relatively normal, yet a buyer in Sri Lanka paid double the expected highest rates. Elhedery originally shared this observation, noting the massive expense associated with recent shipments reaching the island.

Initial reports regarding this massive expenditure were flatly denied by the CPC. The Chairman originally released a statement calling the rumours completely false, insisting the corporation secured crude oil at highly favourable rates despite Middle Eastern instability. He initially cited upcoming shipment prices at approximately $71.99, $111.62, $71.81, and $113.29 per barrel.

To verify the initial claims made at the Hong Kong summit, the Hiru News Division contacted the HSBC Group. The Senior Group Media Manager at the London headquarters confirmed the accuracy of the reports, noting the $286 figure was indeed the highest price heard for an oil barrel.

The official transcript obtained from the HSBC press office regarding the Group CEO's remarks is as follows:

"Realistically, if you want to try to get oil from the Middle East, you may be paying 140 to 150 US dollars. Realistically, if you try to get oil from the Red Sea, you're paying more than 30 to 40 US dollars for shipping. Insurance cost, which used to be 25 basis points, is more like 5% — and war insurance has been scrapped, so you find you're paying 5% without even the war insurance component. So the barrel of oil door to door, or the barrel of refined oil door to door, is way above the headline — twice the highest I've seen. And I'm hoping we don't see more of that. But I've seen this $286 barrel. So, $286 for a barrel of oil that reached Sri Lanka."