Gammanpila assures uninterrupted fuel supply

By Charumini de Silva

The Government yesterday assured to take all possible steps to ensure uninterrupted fuel supply, amidst an escalating foreign exchange crisis in the country.

“Our exports earnings per month on an average is around $ 1 billion and we have noticed that a large amount of foreign income that is generated via exports are not remitted back to the economy. This situation, which was brewing since May, has now reached a critical stage,” Energy Minister Udaya Gammanpila told journalists yesterday. 

As per the latest Central Bank external sector report, $ 201 million was spent on fuel imports in September. During the first nine months, $ 2.6 billion was spent for fuel imports, recording an increase of 36.3% compared to the same period a year earlier.

He also said that the situation had gotten worse as State-owned enterprises such as SriLankan Airlines, Ceylon Electricity Board (CEB) and individual power generating firms owe a large sum to the Ceylon Petroleum Corporation (CPC).

He said the CEB owes around Rs. 96 billion and the national carrier owes Rs. 65 billion. The Minister said although it would not be challenging for SriLankan Airlines as they earn in foreign exchange, it was quite a daunting task for the CEB.

Noting that Sri Lanka uses Merban crude oil and that the order needs to be placed 90 days prior, Gammanpila said that they were exploring possibilities to obtain alternative fuels in the meantime. 

“We have got an uninterrupted supply of crude oil from 23 January, but from 3 to 23 January there is a lacuna of 20 days. If we cannot find any alternative, then we might have to halt the operations at the Sapugaskanda oil refinery again. However, we are trying our level best to obtain crude oil for credit,” he said. 

When asked about the notification sent by the Central Bank to the Finance Minister to increase prices of petrol by Rs. 35, diesel by Rs. 24 and kerosene by Rs. 11, Gammanpila justified that it might have been done after considering the economic impacts, particularly on the depleting foreign reserves.

“Historically, the Finance Ministry is vested with the powers to decide on the fuel prices in the country. Although it is an extra burden to the people that are already battered by rising cost-of-living, imagine all vehicles and industries coming to a halt – now that economic implication is much higher than the price increase.”