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Two fuel ships awaiting payment

22 Jan 2022

  • Fuel stocks stuck due to delay in opening LCs
  • CEB warns of power cuts due to lack of fuel
    By Our Political Editor The Ceylon Petroleum Corporation (CPC) runs the risk of paying demurrage for two shipments carrying 95 octane petrol and diesel which have been anchored in the seas off Sri Lanka for days, due to delays in opening Letters of Credit (LCs) to the tune of $ 58 million, The Sunday Morning learns.  This, as the Ceylon Electricity Board (CEB) warned of possible power outages from Tuesday (25) due to lack of fuel for power generation. The two ships had arrived last Tuesday (18) and Thursday (20) and had to remain without being able to unload their fuel stocks due to the delay in opening LCs, which were not issued even by last evening (22).  A senior official at the Energy Ministry told The Sunday Morning that the CPC would have to pay demurrages of $ 18,000 per day after a three-day grace period. The country currently requires a sum of $ 400 million to import fuel for transportation and industries while an additional $ 100 million is required for thermal power generation to be carried out at full capacity.  Meanwhile, Energy Minister Udaya Gammanpila told the media last week that the $ 500 million line of credit for fuel from India would take more time to materialise as the documentation process was ongoing.  Sri Lanka currently records an income of $ 1,000 million monthly from exports, while only around $700-750 million reaches Sri Lanka’s banking system. Therefore, meeting a monthly fuel bill of $ 500 million has created a massive crunch for US Dollars for the importation of other essential commodities like food, medicine, coal, and LP gas, among others.  CEB General Manager Dr. Susantha Perera speaking to the media last evening warned that if the current status quo regarding the continued supply of furnace oil did not change, there was a significant risk of power outages from 25 January.  “By Tuesday, we run the risk of losing 163 MW of generation capacity due to the lack of furnace oil. We have been told that the next shipment of furnace oil may come in March. Therefore, there is a significant possibility of power cuts starting next week,” Dr. Perera claimed.   

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