Page 8 - AsianOil Week 22 2022

AsianOil SOUTH ASIA AsianOil

Sri Lanka turns to Russia

to ease energy crisis

POLICY SRI Lanka will turn to Russia in the hope that very hard pressed to arrange financing for Rus-
Moscow can keep the island country sup- sian crude purchases as international sanctions
plied with energy, Power and Energy Minister mount against Russia, and Sri Lanka has no cur-
Kanchana Wijesekera said last week. His com- rent options for loan repayment.
ments came as a 90,000-tonne cargo of Russian The Sri Lankan government defaulted on its
oil landed at the port of Colombo. foreign debt of $51bn and is currently attempting
Sri Lanka is dealing with its most serious to restructure it with the advice of international
economic crisis since independence in 1948, consultants.
owing to the mismanagement of the country’s The tanker delivering the Russian crude
finances, which have been under the control waited outside the port of Colombo for a
of the Rajapaksa family. Sri Lankan President month until Sri Lanka could scrape together
Gotabaya Rajapaksa has in recent weeks dis- the $72.6mn needed to pay for the cargo. The The tanker
missed two of his brothers who served as prime Russian crude will allow the Ceylon Petroleum
minister and finance minister, but the president Corp. (CPC) refinery to restart operations after delivering the
himself has refused to resign despite widespread being closed since March, when it ran out of
demonstrations. The country’s foreign reserves feedstock. The refinery itself owes suppliers Russian crude
are depleted, making it impossible to import $735mn and has been unable to find companies
food, medicine and fuel. willing to commit to further crude oil deliveries. waited outside
“I have made an official request to the Rus- The Sapugaskanda refinery outside Colombo the port of
sia ambassador for direct supplies of Russia oil,” produces some 1,000 barrels per day (bpd) of
Wijesekera told a press conference in Colombo diesel that will go a long way to meeting the Colombo for a
last week. “Crude oil alone will not fulfil our country’s desperate fuel shortage once it is back
requirement; we need other refined products as on stream. In order to keep operating, the refin- month.
well.” ery will need another crude cargo during the
Since the start of Russia’s invasion of Ukraine, month of June. The latest crude delivery was
Moscow has been forced to sell its crude oil at a arranged through Dubai-based Coral Energy.
discount on the spot market and search for new Wijesekera said the next order would also be
customers as Western-aligned countries have placed with Coral.
banned or taken steps to reduce the import of The government has been forced to end fuel
Russian fuels. With the recent action taken on subsidies, causing 230% and 137% increases in
May 30 by Brussels to ban tanker deliveries to the the price of diesel and gasoline respectively in the
EU and restrict pipeline shipments, it remains to last six months. Rising inflation is reported to be
be seen what sort of deal Moscow and Colombo having a devastating impact on the poorest of Sri
could arrange. As it now stands, Sri Lanka will be Lanka’s 22mn people.™

P8 www. NEWSBASE .com Week 22 03•June•2022