Cash-strapped Sri Lanka gets Russian oil to ease shortages | New

The shipment of 90,000 tonnes of Russian oil waited offshore for more than a month because Sri Lanka could not pay for the shipment.

Sri Lanka has taken delivery of a shipment of Russian oil to restart operations at the country’s only refinery, the energy minister has said.

The delivery of Russian crude oil – which could soon be subject to a European embargo – had been waiting offshore for more than a month as Sri Lanka was unable to raise the millions needed to pay for it, said on Saturday to the press the Minister of Energy and Energy, Kanchana Wijesekera.

Sri Lanka will pay $72.6 million to buy the 90,000 tonne cargo of Russian oil, the minister said.

“I contacted several countries, including Russia, for help in importing crude oil and other petroleum products,” Wijesekera said.

The 90,000 tonne shipment was ordered through Dubai-based Coral Energy, the minister said, adding that the shipment would facilitate the restart of the country’s only refinery, which has been closed since March 25.

“The next shipment will also be ordered from the same company. Another shipment will be required within the next two weeks to keep the refinery running,” he added.

Colombo is in talks with Moscow to arrange direct supplies of crude, coal, diesel and gasoline despite US sanctions on Russian banks and a global diplomatic outcry over Russia’s invasion of Ukraine.

“I made an official request to the Russian ambassador for a direct supply of Russian oil,” Wijesekera told reporters.

“Crude alone will not meet our needs, we need other refined products [petroleum] products too. »

Sri Lanka is going through its worst economic crisis since independence, with shortages of fuel and other essentials making life extremely difficult for the island nation’s 22 million people.

The country’s efforts to secure fuel supplies came as European Union leaders were in talks to negotiate a new round of sanctions against Russia over the Ukraine dispute, including an oil embargo. Russian oil is already subject to a US embargo.

Sri Lanka’s state-owned Ceylon Petroleum Corporation (CPC) refinery was closed in March following a currency crisis, which left the government in Colombo unable to finance imports, including crude.

The Sapugaskanda refinery, on the outskirts of the capital Colombo, will resume operations in about two days to produce around 1,000 tonnes of diesel per day to meet the country’s severe fuel shortage.

“Inflation crushes the poorest”

Sri Lanka’s economic crisis has seen long queues of motorists outside petrol stations, waiting hours and sometimes even days for meager supplies of petrol and cooking gas.

Residents are also grappling with a severe lack of imported food and pharmaceuticals, as well as record inflation and long daily blackouts.

The IMF said on Thursday it was committed to helping Sri Lanka, but any aid package will depend on ensuring the country’s unsustainable debt can be managed.

Sri Lanka defaulted on its $51 billion foreign debt and on Tuesday appointed international consultants to help restructure its international sovereign bonds and bilateral loans.

The government also effectively ended fuel subsidies by raising prices to a record high on Tuesday. Diesel prices have increased by 230% and gasoline by 137% over the past six months.

Last month, the country’s headline inflation was 33.8% year on year, with food inflation even higher at 45.1%, Sri Lanka’s census bureau reported on Monday.

Johns Hopkins University economist Steve Hanke, who tracks prices in hotspots around the world, said inflation in Sri Lanka was even higher than officially reported.

“Using high-frequency data and the purchasing power parity technique, I accurately measure inflation at 122% year on year,” Hanke said, referring to March inflation, which was officially by 21.5%.

“Inflation is crushing the poorest in Sri Lanka,” he said.

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