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Thursday, 23 May 2013 00:39 - - {{hitsCtrl.values.hits}}
By Uditha Jayasinghe
An indignant Petroleum Minister yesterday dismissed allegations of irregular oil imports, terming them as “irresponsible” and “traitorous” while insisting that the country has stopped Iranian fuel imports since mid-2012 due to US sanctions.
Acting Cabinet Spoke-sman and Petroleum Minister Anura Priyad-arshana Yapa singled out comments made by Uni-ted National Party (UNP) MP Tissa Attanayake that Sri Lanka had lost an oil ship and stressed that no such incident had taken place.
Responding to questions, Yapa explained that the Sapugaskanda oil refinery was built to refine only Iranian light and admitted the Government was struggling to find compatible fuel consignments since US sanctions came into force last year. Instead the Government had opted to purchase blended oil types in an effort to meet local needs. Recently they had started importing Oman blended oil as it was found to be reasonably compatible.
However, he dismissed allegations that the Government had “lost” a ship, pointing out that an Oman oil consignment had been due in Colombo early last month but had been delayed till 16 April due to engine trouble. The Government had then cancelled the Letter of Credit, resulting in the Sapugaskanda refinery suspending operations. Another shipment of one million barrels is due on 24 May and the Minister assured there would be no shortage of fuel.
“We have been looking at different oil types from different countries, including Nigeria, Libya and Saudi Arabia. Finally, we have realised that a type of Saudi oil called ‘Merban’ is the best option and we will be taking steps to import this in the future. All consignments are done under tender procedure,” he added. He also denied any irregularities in sport purchases of oil through Singaporean companies.
Previously reports alleged the Ceylon Petroleum Corporation (CPC) was trying to procure Iranian Light Crude Oil through ‘little-known’ UAE companies such KASB and Mercol.
Industry sources claimed KASB was very late in delivering its oil and has desperately chartered a tanker named Kamila.
The vessel has its P&I Insurance with the West of England P&I club. The West of England P&I club cannot legally insure a vessel carrying Iranian oil, hence the vessel’s P&I cover will automatically lapse as soon as the oil comes on board. This would mean that the Government would have to bear the cost of any accident.
Yapa also emphasised that since the Sapugaskanda oil refinery had limited capacity of 50,000 barrels, it needed an upgrade. Yet he also backed plans by the Government to build a new refinery, saying both measures were needed to meet demand.
Moving on to speculation that the Government would buy back the Trincomalee tank farm from IOC, Yapa stressed that there were no such moves but that they would “work with IOC” to ensure optimum use would be made of the facility.
Earlier reports by the Government Information Department indicated an intention to “renationalise” the tank farm.
