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Five fuel shipments to arrive in July

03 Jul 2022

  • Kanchana sets out tentative fuel import schedule
  • Malaysian Government to provide 50,000 MT of petrol
  • No petrol or jet fuel from Qatar
Minister of Power and Energy Kanchana Wijesekera said that five fuel shipments are confirmed to arrive in the country this month, while the Ministry is awaiting confirmation about two other shipments from Malaysia, with the Ceylon Petroleum Corporation’s (CPC) total petrol stocks remaining desperately low at 4,064 metric tonnes (MT).  “The CPC currently has 5,274 MT of diesel and will receive 7,500 MT more from the Lanka Indian Oil Corporation tomorrow (4) for $ 11 million. We have 1,417 MT of Petrol 92, 2,647 MT of Petrol 95, 237 MT of Super Diesel, 500 MT of Jet Fuel, and 29,000 MT of furnace oil at the moment,” Wijesekera said addressing a media briefing held yesterday (3).  According to Wijesekera, two diesel shipments are confirmed to arrive in the country this month from two private suppliers, one between 8 July and 9 July and the other between 11 July and 14 July. One petrol shipment will arrive between 22 July and 23 July from the Indian Oil Corporation (IOC). One crude oil shipment is confirmed to reach Sri Lanka on 15 July and one furnace oil shipment on 10 July from a private supplier.  Furthermore, Wijesekera said that following a government-to-government request, the Malaysian Government had agreed to provide 50,000 MT of petrol, expected in two shipments.  “We need to pay for the first two shipments. We are waiting for them to confirm the details, but we hope that the first shipment of petrol will arrive between 10 and 11 July. If for some reason we cannot receive this by 11 July, we are also trying other means – we have ordered from three other suppliers too and are awaiting confirmation. They have also agreed to provide 10,000 MT of kerosene,” he said.  Moreover, another diesel consignment is expected from the IOC between 15 July and 17 July, upon advance payment, while two other petrol shipments and one diesel shipment from the IOC await advance payments.  The Lanka Indian Oil Company (LIOC) has confirmed that two petrol and diesel shipments will arrive between 13 and 14 July and 30 and 31 July respectively. LIOC expects another further diesel shipment between 10 and 15 July.  “We need about $ 587 million for the fuel imports this month. The Central Bank of Sri Lanka (CBSL) informed us in the past few months that they can only provide about $ 125 million to us. That is why we tried different alternative methods of importing fuel but we were unsuccessful, especially when working with new suppliers.  “Thus, the Government decided we will somehow find money and provide solutions to the fuel crisis which is why we made our orders. We discussed with the CBSL today too. It is not easy to find this money. But it is a question of how we can find dollars. We will request an approval from Cabinet too, if we can find dollars from exporters or an international bank at least,” said Wijesekera.  He explained that most fuel suppliers are now only providing fuel to the CPC based on cash payments, as the CPC already owes about $ 800 million to its usual suppliers.  “The CPC deposited the required rupees to the respective banks but due to the rupee depreciating, this need is much greater now. The CBSL Governor is discussing with these suppliers now (seven suppliers) and have given them a payment schedule, based on how we can pay, either on a weekly or monthly basis.  “Following that, we made another request whether we can get fuel from them on a credit basis but unfortunately, no supplier agreed to that. We do not have the privilege of obtaining fuel on credit basis anymore. Since the country has informed it has defaulted, most financial companies behind those suppliers will not agree to give fuel to Sri Lanka on credit basis.”  Wijesekera also denied the Janatha Vimukthi Peramuna (JVP) leader Anura Kumara Dissanayake’s allegation that the CPC had paid for fuel in the last week of June, but this had failed to arrive.  “This is false. We opened a Letter of Credit, as I explained last week, but we did not make any payments for a ship that did not eventually come. Either somebody had given Dissanayake the wrong information, or he does not know the difference between a LC and a pre-payment. We have not made any pre-payments for ships that we have not received,” said Wijesekera.  Meanwhile, Wijesekera visited Qatar early last week for discussions about a number of issues facing Sri Lanka, including about the fuel crisis.  “We gave our requests to them and we hope for a positive response. They told us that they don’t export petrol and jet fuel, but only diesel, crude oil, gas, and furnace oil. Depending on what their leaders say, we hope to obtain something on a credit basis. We invited investments from their fuel companies too, noting the recent Cabinet approval for any company to import and distribute fuel in Sri Lanka.”  During the third week of June, a shipment of petrol was due to arrive. However, due to several difficulties that have arisen, CPC was compelled to cancel the agreement with the said supplier.  “We opened a tender for new suppliers but we did not get any bids. Then we assessed the proposals we got and the supplier who was due to send us a shipment last week was selected through that. We hoped to open the Letter of Credit on 3 July, but the Bank of Ceylon couldn’t open it. People’s Bank finally opened but the supplier’s international bank – Standard Chartered Bank – rejected it. Then a financial company of the supplier accepted the LC and informed us that the ship will arrive on 22 June. On 23 June, the supplier informed us that there were technical difficulties. They told us that we need to make a financial deposit before they dock at Colombo Harbour,” said Wijesekera at the time.  Following this, Sri Lanka went into a virtual lockdown, as the Government announced that fuel will only be issued by the CPC for essential services. Schools shut down and remain closed until 8 July.   During the same week, the Government approved a Cabinet proposal to allow private players to enter the fuel import and distribution market in Sri Lanka which will break the duopoly of CPC and LIOC. 

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