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International oil prices: CPC to temporarily shut down refinery

19 Mar 2022

  • Diesel and petrol to be imported
By Asiri Fernando The Ceylon Petroleum Corporation (CPC) will today (20) temporarily shut down Sri Lanka’s only refinery – for the third time in the past few months – due to soaring crude oil prices triggered by the ongoing Russia-Ukraine conflict. CPC Chairman Sumith Wijesinghe told The Sunday Morning that the price of Brent crude oil in the international markets had influenced the decision to temporarily close the Sapugaskanda Oil Refinery.  According to him, shipments of crude oil that were planned to be shipped to Sri Lanka rose in price from about $ 45 million to more than $ 65 million per tanker ship in a span of a few days. “We plan to import petroleum products needed for the local market until we recommence refinery operations,” he said, adding that a recently-secured $ 500 million line of credit from India would be utilised for such imports. Sri Lanka was planning to receive two shipments, each around 700,000 barrels of Brent crude oil, over the next month to be used at the Sapugaskanda Oil Refinery to supply petrol, diesel, and kerosene to the domestic market, along with furnace oil, which is a byproduct for power generation.  The rise in oil market prices and the ongoing foreign currency crisis has strained Sri Lanka’s capacity to import crude oil needed for refining.   Wijesinghe opined that the CPC would have to revisit the decision regarding the halting of refinery operations in late April, expressing hope that by then the world oil market would not be as volatile as it had been over the last few weeks and that then the price of crude oil would drop and stabilise, enabling imports. CPC shut down the Sapugaskanda Oil Refinery last year for a period of 50 days and for 25 days in January this year.  


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