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Energy security: Part payments made for fuel shipments

03 Jul 2022

  • 50% advance payment made on petrol consignment
  • Fuel oil and light crude consignments in the pipeline
By Asiri Fernando The Government has made part payments for two fuel shipments expected to arrive in Sri Lanka between 11-15 and 22-23 July, The Sunday Morning reliably learns. The two consignments are for a 40,000 MT diesel shipment from a Ceylon Petroleum Corporation (CPC) supplier, expected to arrive between the 11 and 15 July, and a 35,300 MT petrol consignment on order from the Indian Oil Corporation (IOC) under a Government-to-Government agreement, which is expected on 22 July. A senior Government official close to the fuel procurement process told The Sunday Morning on condition of anonymity that a 30% advance payment had been made for the diesel shipment and a 50% advance payment for the petrol shipment.   Discussions on payment terms for another consignment of diesel from IOC, which is expected to arrive between 15-17 of this month, are ongoing, the official said. He would not disclose the value of the consignments. Sri Lanka has been struggling to open Letters of Credit (LCs) to import fuel and other essential items over the last six months, with many suppliers now seeking better advance payment terms or third-party guarantees for State bank credit facilities. “Some of CPC’s suppliers are now asking for 110% advanced payment, for the remainder to be reimbursed when the consignment is discharged. The CPC owes them a large sum of money, and they are worried about our payment capacity,” the official explained. According to the official, another consignment of 50,000 MT petrol, which was on order from a CPC supplier and expected to arrive between 8-11 July, needs payments to be made for delivery schedules to be confirmed. Another shipment of 40,000 MT of diesel anticipated to arrive between 8-9 of this month remains unconfirmed due to the lack of any payment by the CPC.  The 50,000 MT consignment of petrol expected between 8-11 July may arrive on two smaller vessels, the official noted. Sri Lanka is running low on all fuel types, especially petrol, with the distribution of fuel by the State-owned CPC now restricted to essential services. This weekend the Lanka Indian Oil Corporation (LIOC) will transfer 7,500 MT of diesel to CPC following a request by the Government. Payments for the transfer have been made, the official said. A shipment of 35,000 MT of fuel oil has been confirmed by the CPC, the official said, adding that payment would be made on arrival. The fuel oil shipment is expected to arrive in Sri Lanka between 14-15 July. The Sunday Morning also learns that a consignment of light crude oil for the Sapugaskanda Oil Refinery is being discussed. Another three LIOC shipments, two petrol and one diesel, are expected later this month and in early August. However, the terms of the consignments are still being negotiated, and as such delivery dates are yet to be confirmed, the official said. Several attempts to reach Minister of Power and Energy Kanchana Wijesekera who has returned from a visit to Qatar, Ministry Secretary Mapa Pathirana, and CPC Chairman Mohamed Uvais regarding the fuel import plans and details proved futile.  


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