The Sri Lankan government is exploring options to purchase discounted oil from Russia, as the island nation desperately looks to replenish its dwindling fuel stocks amid an unprecedented economic crisis.
Sri Lanka will receive two fuel consignments this month and another in August, the Chairman of Lanka IOC, the subsidiary of Indian Oil Corporation, said on Saturday, which will provide much-needed relief to the people facing an unprecedented economic crisis and acute fuel shortages.
On Monday, the Sri Lankan government announced that only essential services will operate from midnight till July 10 and all other operations will be temporarily suspended as the country of 22 million did not have enough fuel supplies.
“Two consignments of fuel (petrol and diesel) are expected to arrive on July 13 or 14, and another shipment will arrive sometime between July 28 to 30. Each vessel will be carrying 30,000 metric tonnes of fuel,” Lanka IOC Chairman Manoj Gupta was quoted as saying by news portal Economy Next.
Another consignment is also scheduled to arrive on August 10, Gupta said. All these shipments will be arriving from Singapore and the UAE, he added.
Last week, state-owned refinery Ceylon Petroleum Corporation (CPC) informed the Sri Lankan government that there will be an indefinite delay in the arrival of fuel shipments due to banking and logistical reasons, with existing stocks being prioritised for public transport, power generation and industries.
Sri Lanka’s unprecedented economic crisis caused by forex shortages has led to a severe crisis in the energy sector. Fuel shortages have led to serpentine queues at retailers and with the end of the credit line worth USD 700 million granted by India, the pumps have run dry.
The Sri Lankan government is exploring options to purchase discounted oil from Russia, as the island nation desperately looks to replenish its dwindling fuel stocks amid an unprecedented economic crisis due to a crippling shortage of foreign exchange reserves.
Sri Lanka’s Power and Energy Minister Kanchana Wijesekera flew to Qatar last week to negotiate a long-term fuel supply deal with the Gulf nation. The Lanka IOC has expanded its distribution network by providing fuel continuously when the CPC pumps went largely dry.
The nearly-bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, had announced in April that it is suspending nearly USD 7 billion foreign debt repayment due for this year out of about USD 25 billion due through 2026.
Sri Lanka's total foreign debt stands at USD 51 billion. Sri Lankans continue to languish in long fuel and cooking gas queues as the government is unable to find dollars to fund imports for fuel and other essentials.