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CPC did not request USD from CEB

31 Jan 2022

  • All Energy Ministry wanted was assistance from CEB to obtain credit, says Min. Secy.
  • Says demand increased along with the price of a barrel
By Shenal Fernando The talks which circulated that the Energy Ministry had required the Ceylon Electricity Board (CEB) to pay for its fuel requirements in US dollars were a misunderstanding, and the Ministry had merely requested the CEB to assist in obtaining the required US dollars, according to the Ministry of Energy. Speaking to The Morning Business yesterday (30), Ministry of Energy Secretary K.D.R. Olga stated that the Ministry of Energy had at no point asked that the payment for the fuel supplied to the CEB by the Ceylon Petroleum Corporation (CPC) be made in US dollars. “The CPC is unable to cater to the recent increased fuel demand of the CEB as a result of the dry weather due to high prices for refined products in the world market, which have reached around $ 100 per barrel. We are unable to face this situation alone due to the current foreign exchange crisis in the country. Therefore, we merely requested them to intervene in the preparation of the necessary facilities to import fuel, and not to pay in US dollars, as reported, because they are not foreign exchange earners,” stated Olga. However, she further stated that the CEB had obtained fuel from the CPC during January 2021 on credit up to a value of Rs. 6.3 billion, taking the total amount owed by the CEB to the CPC to around Rs. 100 billion. According to her, this amount owed to the CPC would have to be collected soon as the CPC is in need of Sri Lankan rupees to pay the local banks for the purchase of US dollars. Olga added: “If the CEB does not take steps to rectify this situation, we will face major issues in purchasing the required US dollars for imports in the near future.” Minister of Energy Udaya Gammanpila in a recent interview with World is One News (WION), an Indian multinational English language news channel headquartered in New Delhi, stated that in November, 65% of the electricity generation in the country was through hydro and that it is currently down to 25%. Therefore, he claimed that he expects definite power cuts in the county from early March or probably even as early as mid-February. Explaining further, he stated: “The annual demand for power in Sri Lanka grows by 8% per annum so periodically the Government must introduce new power plants to meet the demand. Unfortunately, since 2014, there has been no addition to our family of power plants. Usually, from January to April, there is a dry season in Sri Lanka, as a result, the levels of our water reservoirs drastically go down. During that time, we heavily depend on thermal power plants to meet the electricity demand. Unfortunately, since we did not add either renewable or thermal power plants to our grid during the last eight years, the existing thermal power plants are not in a position to meet the entire power demand of the country.”


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