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Omani credit facility expected in December

BY Buddhika Samaraweera

The Energy Ministry is confident that the $ 3.6 billion credit facility, to be obtained from Oman to purchase fuel, will be available by mid December, The Morning learnt.

Speaking to The Morning, Energy Ministry Secretary K.D.R. Olga said that preliminary cabinet approval has been granted to obtain the relevant credit facility. She added that they hope to receive it within another six weeks after the completion of the due processes, including the preparation of the relevant documents.

“We have received principal cabinet approval to proceed with the process of obtaining this credit facility, but obtaining a credit facility of $ 3.6 billion is a very serious matter, so there is a process of preparing the relevant documents. After that, an agreement should be signed by both the parties, and the Attorney General’s (AG) clearance should be obtained for that. That process is currently underway,” she explained.

Elaborating further, Olga added that the credit facility is provided only for the purchase of fuel, and that Oman has also proposed a fuel supplier.

“They have proposed a fuel supplier. We will have to buy fuel through them following the negotiations on the relevant terms and conditions.”

When questioned about the availability of fuel in the country until the relevant credit facility is available to purchase fuel, she said that annual fuel purchase agreements are also being updated. “We can’t depend only on this credit facility. Therefore, tenders have been called for annual fuel purchases.”

Meanwhile, when queried as to whether the Ceylon Petroleum Corporation (CPC) is also planning to increase fuel prices due to the recent hike in fuel prices by the Lanka Indian Oil Corporation (LIOC), Olga said that the CPC alone could not decide to increase prices. “The CPC is bearing the loss at the moment and selling the fuel at current prices. We have no other solution yet. We have requested the Finance Ministry to provide some relief to the CPC. But there is still no answer. Therefore, the CPC will have to sell fuel at these prices until we get a positive response from the Finance Ministry,” she mentioned.

Finance Ministry and Treasury Secretary S.R. Attygalle was not available for comment.