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Saturday, 11 February 2012

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Impending world oil crisis :

Govt in talks with alternative suppliers

The government has initiated discussions with alternative suppliers of oil in preparation of the impending world oil crisis due to the US economic sanctions on Iran, said Petroleum Industries Ministry Secretary Dr R S H Samaratunaga.

Addressing a press conference at the ministry yesterday, he said that the government has begun discussions with Oman, Qatar and Saudi Arabia on the supply of oil.

He observed that the six months grace period for oil related transactions as announced by the US would be over by July this year.

Dr Samaratunaga noted that even though the government could ensure enough supply of oil for the country, the government has no control over the price factor.

He observed that since Sri Lanka has no control over the factors such as world oil supply, demand and prices, the only solution would be to limit the use of oil and pay more attention towards the alternative energy resources.

Dr Samaratunaga noted that with the statement of the US sanctions on Iran, oil prices in the world market have been rising sharply. The price of an Iranian Light Crude Oil barrel which was US$106 in the beginning of January has gone up to US$115 by Thursday.

He pointed out that from the total oil importation to Sri Lanka, about 25 to 30 percent is crude oil and the rest is imported after refining. He said that crude oil types such as Iranian Light imported from Iran and Arabian Light imported from Saudi Arabia provide a greater yield in the Sapugaskanda oil refinery.

He noted that the country has imported 12 ship consignments of crude oil, and 11 out of them had been from Iran and one from Saudi Arabia.

One shipment carries about 135,000 metric tons of crude oil. He also explained that last year, Sri Lanka has imported two million metric tons of crude oil at a total cost of US$ 1,674 million. From that quantity, 1.93 million metric tons was purchased from Iran on concessionary rates spending US$ 1,562 million.

He observed that Sri Lanka had been continuously buying crude oil from Iran since 1960s. Dr Samaratunaga noted that the CPC had released 355 million liters of diesel, 67 million liters of Nepta and 976 million liters of furnace oil to the CEB for power supply.

He noted that the Sri Lankan government provides kerosene and diesel at concessionary prices to the public incurring a heavy loss. CPC acting chairman Wasantha Ekanayake, CPC commercial manager C P Samaraweera, and CPC additional finance manager S Sundaralingam also participated.

 

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