Crisis-hit Sri Lanka woos foreign oil firms amid fuel shortages

REUTERS: Sri Lanka canvassed oil companies in petroleum-producing nations yesterday to import and sell their products in the Indian Ocean Island, opening its market to resolve acute shortages of fuel during its worst economic crisis in decades.
Depleted foreign exchange reserves have left the nation of 22 million unable to pay for imports of essential items from fuel to food and medicines.

“An advertisement was published today calling for expression of interest (EOI) for oil companies to import, distribute and sell petroleum products in Sri Lanka,” Kanchana Wijesekera, the Power and Energy Minister, said on Twitter yesterday. The news follows Sri Lanka’s decision last month to allow such imports and sales, as it scrambles to ensure sufficient supplies of petrol and diesel.
The approvals for oil firms to be picked in the new process will effectively end a market duopoly involving a subsidiary of India’s state-run Indian Oil Corp.
State-run Ceylon Petroleum Corp (CPC), which controls about 80 percent of the market with a national network of 1,190 fuel stations, will give a share of its resources and pumps to the new entrants, the government said in its notice.

Cabinet nod for two new committees to ensure continuous fuel supply

As the country’s fuel import bill is estimated to increase to US$ 6.7 billion this year, the Cabinet nod has been granted to appoint an advisory committee and officers’ committee to ensure continuous fuel supply by effectively managing limited fuel imports.
Power and Energy Minister Kanchana Wijesekera on Monday sought the approval of the Cabinet of Ministers to appoint the advisory committee and the officers committee to ensure smooth fuel supply in the country.

In a detailed explanation, Wijesekera had briefed the Cabinet of Ministers on the on-going energy crisis and strategies in place to effectively manage the limited fuel imports. According to Cabinet Spokesperson and Minister of Transport, Highways and Mass Media Bandula Gunawardane, the country’s fuel import bill is set to increase to US$ 6.7 billion from US$2.7 billion in 2015, mainly due to high crude oil prices in the world market. However, he stressed that the government is unable to finance US$ 600 million for fuel imports per month with merchandise export income hovering around US$1 billion a month. According to Wijesekera, the country needs to cut down fuel usage by around 30 percent until the foreign exchange crisis eases off.