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
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.