Sri Lankan petroleum ministry today dismissed as "false rumours" the claims of a workers' union that the Indian Oil Corporation's subsidiary in the island nation has imported "poor quality" aviation fuel.
Last month, Sri Lanka faced acute fuel shortage after authorities turned away a consignment of gasoline of Lanka Indian Oil Company (LIOC), a subsidiary of Indian Oil Corporation Limited, terming it as "contaminated".
A shipment meant for the state petroleum firm, Ceylon Petroleum Corporation (CPC), was also delayed, leading to long queues of motorists at petrol stations across the nation.
"We have information that another shipment, this time aviation fuel, imported by LIOC has been proved to be of poor quality. The samples tested have proved this," claimed Bandula Saman Kumara, a trade unionist from the Sri Lanka Freedom Party (SLFP).
"Furthermore, the consignment was the result of a diplomatic intervention violating the tender procedure," he alleged.
Reacting to the claim, a top Sri Lankan petroleum ministry official, Upali Marasinghe dismissed it as "false rumours".
The petroleum sector trade unions have been opposing the proposal to transfer operations rights of the 70 second world war era oil storage tanks in the eastern port district of Trincomalee to India.
They are claimed that the agreement would benefit the Lanka IOC, allowing it to expand further and the CPC, which is already in debt, will incur further financial losses.
They had also asked the government to shelve plans to build a new oil refinery with Chinese assistance in the southern port of Hambantota and to immediately begin repairing the existing refinery near Colombo.
Convenor of the trade unions, D J Rajakaruna said the tanks in Trincomalee would be crucial for Sri Lanka's oil storage needs but the government, instead of keeping them under the state, was trying to handover them to India.
The Lanka IOC, engaged in bunkering operations since 2002, runs 15 out of the 99 storage tanks in the lower oil tank farm in Trincomalee. The proposed joint venture would deal with the 84 tanks in the upper farm.
Sri Lanka would retain 10 of them for use by the CPC.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)