Govt. rules out fuel shortage, says no need for panic or speculation

The Government yesterday ruled out a fuel shortage, assuring there is sufficient stock, and that public panic and speculation were unnecessary.

“The Government is ready to bear the cost of fuel imports. There is no shortage of fuel in the country,” Co-Cabinet Spokesman and Plantation Industries Minister Dr. Ramesh Pathirana said at the post-Cabinet meeting media briefing held yesterday.

Concerns over fuel supplies have remained allied with spikes in global prices as well as the country’s foreign exchange crisis. 

The Cabinet last week approved talks for a massive $ 2.5 billion loan from foreign insurance or pension funds to offset part of the accumulated fuel import bills. Cabinet approved the proposal after studying several unsolicited proposals by private agents to offer a loan to the Government.

The cost of fuel imports in the first seven months of this year has risen by 41.5% to $ 2 billion, while in July it rose by 28% to $ 256 million. Of that, refined petroleum imports rose by 51% to $ 1.5 billion and crude oil by 28% to $ 409 million. The import expenditure per barrel of crude oil amounted to $ 68.92 in July 2021 compared to $ 46.23 in July 2020. 

Last month, Energy Minister Udaya Gammanpila requested the public to use fuel economically in an effort to save foreign currency for much-needed medicines and vaccines. 

“The reality is that we are in a foreign currency crisis. Fuel was 18% of our import bill in 1H of 2021. It may be around 25% in 2H. Please use fuel economically to save foreign currency for much needed medicine and vaccines,” Gammanpila tweeted.

In the latter part of last month, he held talks with UAE and Iran on obtaining crude oil and petroleum products on a long-term credit facility as a solution to the present foreign exchange crisis. Dr. Pathirana though said that no final decision had been taken on finding alternative fuel suppliers.

“Traditionally, the Energy Minister pays an official visit to the oil importing countries to hold discussions. The Minister held discussions on the prices as well as the possibility of extending a long-term credit facility to Sri Lanka. However, a final decision on them has not been taken,” Dr. Pathirana added.