Energy Minister Udaya Gammanpila said requests have been made from several countries at State leadership level to provide the country with long-term financial assistance to overcome the current fuel crisis.
“We have also taken steps to meet all the Ambassadors from the oil producing countries on March 15 to discuss steps to import fuel on a long-term loan basis,” Minister Gammanpila said.
Currently, allocating funds for fuel imports is a big challenge, he said in response to a question raised by UNP Leader former Prime Minister Ranil Wickremesinghe in Parliament yesterday.
Minister Gammanpila said that in December last year a barrel of crude oil was sold at US$ 72 but by day-before-yesterday (22) it had risen to US$ 99. However, he said that with the escalation of the conflict between Russia and Ukraine, it is likely that the price of a barrel of crude oil will pass the US$ 100 mark soon. Between December 20 and yesterday, crude oil prices have increased by nearly 38 per cent, he said.
Minister Gammanpila noted that while the issue was discussed at the special Cabinet meeting held on Tuesday, it was decided not to increase Ceylon Petroleum Corporation (CPC) fuel prices despite the rising cost of fuel in the world market. The Lanka Indian Oil Company (LIOC) had recently revised its pump prices. He also said that Sri Lanka still has the lowest fuel prices in the South Asian region, even after the last increase. Minister Gammanpila has suggested to the Government to do away with import taxes and duties on all types of fuel to afford relief to the public.
“The fuel prices are rising and by March we can expect a barrel of crude oil to increase to US$ 115. As the Energy Minister I have done my part and I have brought the fuel shipments up to our waters, but the fuel can be cleared only if the Finance Ministry releases the dollars to pay for it. However, I must say that we have not turned away any of the fuel shipments that have arrived in the country and we have somehow managed to pay for the fuel and unload it here.”
Wickremesinghe asked the Energy Minister if there was a mechanism to purchase fuel over the next three months without any issue. “There is plenty of fuel in the world market, but the question is whether we have the money to purchase fuel. I suggest to the Government to pay for the spot purchases made so far, otherwise we will end up having to pay over US$ 100 per barrel soon.”
The Energy Minister meanwhile admitted that it is currently a challenge to allocate funds for fuel imports given the present economic crisis in the country. Sri Lanka recently received 40,000 MT of oil from India and also signed a US$ 500 million Credit Line with India for fuel purchases.
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