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New petrol over weekend only if LC opened

17 Jun 2022

  • BOC unable to open LC, Govt. counting on People’s Bank
  • Kanchana says importing monthly fuel a ‘serious challenge’ GoSL awaits official word from India on fresh $ 500 mn credit line 
Minister of Power and Energy Kanchana Wijesekera said yesterday (16) that the next petrol shipment will arrive within three days, if the planned letters of credit (LCs) in this regard were opened by yesterday evening.  “The relevant Cabinet Sub-Committee approved two suppliers for petrol and diesel imports this week. The LCs for the imports were due to be opened on 9 June. But on 10 June, the Bank of Ceylon (BOC) informed us that they could not open the LC. Thus, we are now trying to open a LC with the People’s Bank. We hope that it will open today (16) evening. If it is opened today, then the next petrol shipment will arrive in three days, while two more ships will arrive within eight days. This is dependent on whether we can open the LC today,” Wijesekera said, addressing a media briefing held yesterday.  Wijesekera explained that the task of importing the monthly fuel requirement has become a “serious challenge”, adding that the Central Bank of Sri Lanka (CBSL) has explained that it cannot provide the full $ 550 million needed for a month of fuel imports.  “Last month, we received $ 90 million from the CBSL for fuel imports and made up the rest through the Indian credit lines. Therefore, we are trying to get different companies to get the fuel for us. For example, we spend about $ 50 million for jet fuel every month. We opened tenders, but no company stepped forward. Then, we requested proposals from companies, and six companies came forward. Thus, a company was approved this week by the Cabinet Sub-Committee for jet fuel imports, and we hope to enter into an agreement with them. They will import it and distribute it through the Ceylon Petroleum Corporation,” said Wijesekera.  Furthermore, Wijesekera said that three new suppliers have been approved for crude oil imports, and that one shipment has already been requested from one company, while tenders have been opened for another of the two other companies.  Fuel shortages have kept the country distraught all year. A ration system for fuel is due to be introduced from the first week of July. Sri Lanka has been heavily dependent on the Indian credit lines, totalling $ 700 million, for fuel imports over the last few months. However, the last shipment of 40,000 metric tonnes of diesel through the Indian credit line reached Sri Lanka yesterday and now, the immediate future looks bleak for the country's energy sector, even as the Cabinet of Ministers last month approved a proposal to obtain another $ 500 million credit line from India.  Commenting on the status of this new $ 500 million credit line from India, Wijesekera said yesterday that the Government of Sri Lanka (GoSL) is still awaiting the Indian Government’s official communication on the matter as only an unofficial communication was received three weeks ago. Minister of Power and Energy Kanchana Wijesekera says that two new private international companies have been selected to supply petrol and diesel to Sri Lanka while another private company has been selected to supply jet fuel (aviation fuel).  The minister made this observation during a press conference held today (16) at the ministry premises to brief the media on the present fuel situation in the country.  He stated that four suppliers have been given permission to import crude oil based on the proposals put forward by them and that two suppliers have been given permission for the import of petrol and diesel required for the coming week.  The minister said that whenever any supplier presents a proposal it is studied and permission granted by the cabinet sub-committee comprised of officials if it is a new supplier.  Accordingly, for now four suppliers have been given the relevant documents to import crude oil to bring in the first shipment as an experiment, he said.  He said two other companies have been given permission for petrol and diesel imports under three orders.  Wijesekera further said that only a limited number of people can be supplied with fuel from a load of a fuel bowser. He said a fuel load is 6,600 liters and that within the previously announced fuel release limit, one load can only supply 220 vehicles with fuel, however there are around 2,000 vehicles in queues at some fuel stations. “Please be aware of that. Fuel bowsers cannot be sent repeatedly to one gas station.” “So we can send a load back to that gas station on the next scheduled date,” he said.   


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