Forex shortage for crude import forces Sri Lanka to close refinery, but fuel supply intact: mins...
ECONOMYNEXT – Sri Lanka has once again closed down its state-run oil refinery in Sapugaskanda due to a shortage of foreign exchange to pay for crude oil but there are adequate stocks and there will be no fuel shortage, an official said.
Minister of Power & Energy Kanchana Wijesekera told parliament on Friday October 07 that refined products lost as a result of the closure will be imported as finished products until adequate forex is issued to clear the next crude shipment anchored off the Colombo port for the last 10 days.
“We had to take a decision. Unfortunately, we are closing the refinery. We did the refinery activities of the past two months using crude oil from two ships we received,” said Wijesekera.
As soon as adequate forex is available, the 100,000 MT ESPO Crude Oil Cargo will be unloaded, he said.
“We have deposited the necessary rupees for that but have not received the forex for the payment. So we took a policy decision to close the refinery.”
The minister said enough fuel stock is available with the state-run Ceylon Petroleum Corporation (CPC) and no fuel shortages will occur going forward.
“Even if the refinery is closed, the CPC has enough fuel stocks. And the Central Bank is supporting us and has made available the weekly forex requirements to purchase fuel. So we can continue to supply fuel without any backlogs. There will be no shortages because the amount we lost from the refinery will be imported as finished products,” he said.
The Sapugaskanda refinery was closed since 2021 and resumed operations in March this year and was closed again in July until it was reopened in August. It was also shut down for a week in May this year due to a technical issue. (Colombo/Oct07/2022)
