- Key discussions ongoing between SL and US
- US cuts tariffs from 44% to 20%
- SL open to US fuel imports via competitive bidding
- Shipping time concerns raised
Samples of US-origin West Texas Intermediate (WTI) crude oil are currently being tested in Sri Lanka’s laboratories as part of plans to include it in future petroleum import tenders, The Sunday Morning learns.
Once approved, WTI will join Murban crude oil as a key option for the country’s fuel supply.
In the meantime, it is also learnt that discussions between Sri Lanka and the US have commenced and are ongoing as both countries work to address trade issues following the reduction of US tariffs on Sri Lankan exports from 44% to 20%, as reliably learnt by The Sunday Morning.
The talks began after US President Donald Trump cited Sri Lanka’s 88% tariff on US goods to justify imposing a 44% reciprocal tax.
This figure was calculated by dividing Sri Lanka’s trade deficit with the US by its total exports to the US.
Sri Lanka exports about $ 3 billion worth of goods to the US but imports only $ 368 million, resulting in a trade deficit of roughly $ 2.63 billion – nearly 88% of its exports.
Trump claimed this reflected Sri Lanka’s high tariffs and trade barriers.
However, despite the aim of reducing the trade imbalance, The Sunday Morning learns that progress remains limited thus far.
When contacted, Ceylon Petroleum Corporation (CPC) Managing Director Dr. Mayura Neththikumarage said Sri Lanka was open to importing fuel products through competitive bidding, offering US firms opportunities to supply crude oil, refined fuel, and liquefied gas.
“We have arranged to import WTI crude oil; samples have been received and are undergoing testing. Once approved, WTI will be added to future tenders alongside Murban crude oil,” he said.
Dr. Neththikumarage noted that concerns about shipping times from the US had been discussed, emphasising early planning by traders involved in supply imports.
He also assured that costs would be manageable thanks to the competitive bidding system, allowing Sri Lanka to purchase fuel at the lowest possible prices from US suppliers.
WTI is a type of light crude oil, known for its low density and low sulphur content, making it relatively easy to refine. It is one of the three main global benchmarks for oil pricing.
According to a press release from the Central Bank of Sri Lanka’s Economic Research Department earlier this year, fuel imports saw a significant decline in 2024, driven by lower crude oil and coal imports, despite total merchandise imports reaching $ 18.84 billion in 2024.
The report shows a 7.4% decline in fuel imports between 2023 and 2024, with over $ 4.35 billion spent on fuel last year.
While Sri Lanka currently procures crude oil primarily from Gulf countries, the decision to include US-registered firms in future tender processes came after virtual talks on reducing the tariffs imposed on Sri Lanka by the US.
At present, Sri Lanka imports petroleum products from established suppliers such as PetroChina International (Singapore) Ltd. and Vitol Asia Ltd., also based in Singapore.
Meanwhile, President Anura Kumara Dissanayake said last week in Parliament that some agreements had been reached during the discussions, resulting in the tariff rate being reduced to 20%.
Sri Lanka’s main exports to the US include apparel, tyres, coconut products, and cinnamon. Even countries with trade surpluses, such as Singapore, have faced US tariffs. Meanwhile, Sri Lanka maintains high import taxes on some US goods.