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Fuel imports monopoly to LIOC?

09 Dec 2021

  • Ajith P. Perera alleges Basil entered into agreement with India during recent visit
  • Claims agreement to permit LIOC to import entire national requirement
  • Ministry of Energy denies allegations
BY Shenal Fernando Former United National Party (UNP) MP Ajith P. Perera has alleged on social media that Lanka IOC (LIOC) has been granted complete control over fuel imports to Sri Lanka. Explaining this allegation, Perera claimed that according to the agreement entered into by Minister of Finance Basil Rajapksa in his recent visit to India, LIOC will import sufficient quantities of fuel to fully cater to the country’s fuel demand and that subsequently all fuel requirements of Ceylon Petroleum Corporation (CPC) sheds must be purchased from LIOC. However, these allegations were refuted by Ministry of Energy Secretary K.D.R. Olga, who spoke to The Morning Business yesterday (8). “We have no idea on what he is basing these allegations on, but what he stated is completely false. They (LIOC) will, as per their right to do so, import the necessary fuel for their requirements and the CPC will continue to import separately the necessary fuel for its requirements. There is no other arrangement as he claims so,” she said. The Minister of Finance visited New Delhi on a two-day official visit at the invitation of Indian Finance and Corporate Affairs Minister Nirmala Sitharaman. Obtaining financial assistance from India in order to ease pressure on the country’s foreign reserves, while also preventing a scenario where the Government would have to seek assistance from the International Monetary Fund (IMF) to address the current economic crisis, was expected to be a priority in this visit. A new release published by the High Commission of Sri Lanka in New Delhi on 3 December claimed that the Sri Lankan Finance Minister had briefed the Indian authorities of the economic situation in Sri Lanka and his Government’s approach to addressing post-Covid-19 challenges. In return, the Indian authorities had expressed India’s solidarity with Sri Lanka at this juncture and had reiterated that India will stand by Sri Lanka as per its “Neighbourhood First” policy. Accordingly, it was claimed that both sides had discussed the offer of a currency swap to help Sri Lanka address the current balance of payment (BOP) issues, as well as a food and health security package on an urgent basis that would envisage an extension of a line of credit to cover the import of food, medicines, and other essential items from India to Sri Lanka and an energy security package that would include a line of credit to cover import of fuel from India, along with an early modernisation of Trincomalee Oil Tank Farm. However, as per reports, both parties did not arrive at a final decision on the above proposals and will be communicating with each other directly and indirectly in order to achieve a satisfactory resolution within a mutually agreed timeline.

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