Sri Lanka, UAE sign petroleum reserve deal

S. Senanayake

The government has reached an agreement with a petroleum company in the United Arab Emirates for a petroleum reserve over a period of six months. Petroleum Industries Ministry Secretary Titus Jayawardena said that this agreement was carried out on the instructions of President Mahinda Rajapaksa as a solution to the large sum spent to purchase petroleum from foreign countries.

He said that the benefits under this agreement would be passed on to the consumers.

The Secretary also said that the government incurred heavy losses in providing petroleum to the consumers at prices lower than the purchased price.

“Under the new agreement, Sri Lanka will buy 3.6 million barrels of petroleum over a period of six months directly and therefore it would be possible for the government to save a large sum of money which had hitherto been passed on to middlemen,” Jayawardena said.

The Secretary added that discussions were under way with Malaysian, Omani and UAE governments to purchase petrol, from which also a large sum could be saved by the corporation. The agreement signed by Sri Lanka with UAE, is in operation from May 1, 2011.