US$587 needed for planned fuel imports – The Island

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By Rathindra Kuruwita

Sri Lanka has to pay US$587 million for planned fuel imports until mid-August, Energy Minister Kanchana Wijesekera told media in Colombo yesterday (03). This amount was equal to 217 billion rupees, at an exchange rate of 367 rupees per dollar, he said.

On Monday, Sri Lanka had to pay $34 million to the Indian Oil Company (IOC) and another $76 million to a Malaysian company. On July 6, an additional $34 million must be paid to the IOC.

“On July 8, we have to pay for three shipments. $19.95 million to the IOC. $49.54 million to Singaporean company Vitol and $66.53 million to UAE-based Coral Energy DMCC. This amounts to $136.2 million. On July 10, we have to pay $36.43 million for a fuel oil delivery, and $82 million to Coral for a crude oil delivery. This $316 million is for ships that will arrive in July,” he said. The minister added that $122 million was to be paid to the IOC for two ships carrying gasoline and $67 million for one carrying diesel in the coming weeks.

“These ships will arrive in mid-August,” he said.

The minister said they had to pay suppliers in advance and initially the Central Bank of Sri Lanka (CBSL) and the Treasury had insisted that they could only allocate US$125 million for imports of fuel.

“Given this limitation, we have tried different methods to obtain fuel, but without success. We tried new providers, but that also led to a lot of problems. So ultimately the president and the prime minister decided that the ministry should be given money to buy fuel,” he said.

Minister Wijesekera said he had spoken to the Governor of CBSL and the Treasury Secretary to obtain foreign currency to purchase fuel.

“It’s not easy. They promised to give us rupees and we have to find dollars. We have to get the money from exporters or international banks. Are they going to give us dollars at 367 rupees? What will happen? If they ask for a higher rate of exchange I will ask Cabinet today to approve the payment of higher rates if the need arises,” he said.

The oil companies will only supply oil once the payments have been made, as Sri Lanka owes them hundreds of millions of dollars. Between November 2021 and April 2022, the CPC alone had to disburse $326 million to businesses through Bank of Ceylon, $242 million through People’s Bank and $80 million through other banks, he said.

“The CBSL Governor is talking to seven suppliers. He gave payment schedules so that weekly or monthly payments could be made. We gave them guarantees. Yet they will not provide new shipments unless initial payments are made.

Minister Wijesekera said Sri Lanka on June 30 paid $11 million to buy 7,500 tonnes of diesel from LIOC. Diesel shipment will be sent from LIOC facility in Trincomalee to Colombo today (04). As of Sunday afternoon, CPC had 12,774 metric tons of diesel, 1,414 metric tons of gasoline 92, 2,647 metric tons of gasoline 95, 233 metric tons of super diesel, 500 metric tons of jet fuel and 29,000 metric tons of oil used to generate electricity. , he specified. The Minister indicated that the first shipment of fuel to the country for the month of July is a shipment of diesel which will arrive on July 08 or 09. This will be provided by a company in the United Arab Emirates. Singapore’s Vitol will send another ship carrying diesel between July 11 and 14. Another diesel shipment could arrive between July 15 and 17. However, this expedition has not yet been finalized, he said.

“On July 22 or 23, a patrol will be provided by the IOC. The diesel cargo that could arrive between July 15 and July 17 must also be provided by the IOC. The IOC has asked us to settle 50% of the payment by today and deposit the rest by Wednesday. We asked them to let us pay 30% by Wednesday. We have also spoken to the Malaysian government and they could supply us with 50,000 metric tons of gasoline and 10,000 metric tons of kerosene. It has not been finalized. If it works, we could get a shipment of gasoline by July 10 or 11,” he said.

Wijesekera added that Coral’s expected crude oil shipment from the UAE will consist of 135,000 metric tons. On August 12, another crude oil ship is expected, he said.

Speaking about his visit to Qatar, Minister Wijesekera said he had met with a number of officials and that they could supply diesel, crude oil, fuel oil and gas to Sri Lanka at a preferential rate, at the discretion of the Emir of Qatar. “Even if it happens, it won’t happen overnight. If we need to buy oil, we could buy directly from their private companies, Qatar officials said. Qatar is not an exporter of gasoline or jet fuel. They are a gas giant, however. Qatari officials said they offered to build an LNG terminal in 2019, but there was no response from Sri Lanka,” he said.

The minister said he also spoke to the Qataris about oil exploration in Mannar. Minister Wijesekera said he had asked CPC officials to provide him with a supply plan until December. He added that the CPC was overstaffed.

The Minister urged expatriate Sri Lankan workers to send funds through the banking system and help revive the economy and alleviate the suffering of their fellow citizens.

“Once the fuel starts arriving, the queues will disappear. I want to add one more thing. A token system is now in place. However, we never asked for this system. What I said last month, when announcing that we will only provide fuel to essential services, was to give a token to people who were queuing at that time. I specifically asked people not to join the queues anymore. Now only LIOC distributes fuel to private vehicles, and they have launched a token system. That’s not what we wanted,” he said.

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