Rs4.7 bln: Consumers will pay losses

It was revealed in the National Assembly yesterday that in 2009 the State Trading Corporation (STC) recorded three cases of contaminated fuel oil products which cost the country about Rs110 million. 

The disclosure came from Minister of Business, Enterprise, Commerce and Consumer Protection, Mr Michael Sik Yuen in reply to the Private Notice Question (PNQ) from the Leader of the Opposition, Mr Paul Berenger. 

He also admitted to the House that fuel hedging losses amounted to Rs4.7 billion with accrued interest of Rs250 million – losses that consumers will pay for through the fuel surcharge. 

The minister told the House 9,751 metric tonnes of fuel were contaminated in February 2009, 10,762 tonnes in March and 15,745 tonnes in July of the same year. The minister also disclosed that loss recovery has been referred to the London Court of International Arbitration.

It has yet to be thrashed out. “Contamination of 954 metric tonnes of jet A1 in the slop tank onboard the MT Wawasan Celeste was detected by STC’s surveyors and the cargo was not allowed to be unloaded. The remainder of the consignment of 14,900 metric tonnes was not contaminated. 

A claim for the amount insured is being processed by STC’s insurer,” explained Minister Sik Yuen. The minister also revealed that a committee has been set up to look into a report on the STC submitted by Insight Forensics Services Ltd. 

“The findings will be studied and any restructuration of the corporation will be carried out in the light of the recommendations of the committee.” The PNQ slot proved very arduous for the minister, who was under constant pressure from Mr Berenger and Opposition backbenchers. 

Given the Commerce portfolio only recently, Mr Sik Yuen was obviously ill at ease and not well acquainted with the dossier. On several occasions he had to ask for notice of the questions so that he could be briefed for appropriate answers. 

“I am new there…a little more than one week,” he explained. “I need some time.” The main part of the question was on what Mr Berenger called the “hedging saga”.