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Sapugaskanda to be closed in two weeks?

17 Jun 2022

  • Petroleum unions claim Govt. has no choice due to lack of crude oil 
  • Current crude stock only until 28 June, no inkling of next shipment’s arrival  
  • Ministry says stocks ordered to ensure non-closure, fails to specify arrival date
BY Buddhika Samaraweera The Petroleum Trade Unions’ Confederation (PTUC) has claimed that the Government has no choice but to close the Sapugaskanda Oil Refinery by 28 June, allow it to operate as a “white elephant”, or hand it over to some other party, given that there is no idea as to when a crude oil tanker will arrive in Sri Lanka. Speaking to The Morning yesterday (16), PTUC Convener Ananda Palitha said: “At present, the Sapugaskanda Oil Refinery is operating at a daily capacity of 3,400 metric tonnes (MT). In this situation, the current stock of crude oil will be sufficient only until 28 June. Once the crude oil stocks that are currently in the country are depleted, the refinery will have to be closed again. In particular, the authorities have not commented on a possible date of the return of a crude oil tanker to Sri Lanka.”  If the refinery is closed for a few days, it cannot be operated at full capacity as soon as it is reopened, as was seen after the closure earlier this year. Palitha also said that the refinery would have to reduce its capacity to 3,200 MT a day if it were to operate for a few days beyond 28 June without shutting down. He said that such a reduction in capacity would lead to a decline in fuel production and an increase in furnace oil production, which would automatically turn the refinery into a white elephant project. When inquired about the PTUC’s statement that the refinery would have to close by 28 June as a shipment of crude oil is not scheduled to arrive any time soon, a senior official of the Ministry of Power and Energy told The Morning that crude oil had been ordered in such a manner that it would not be necessary to shut down the refinery. However, when queried as to when a crude oil tanker would arrive in Sri Lanka, he failed to mention an exact time period and instead said that the “refinery will not be closed”.  Attempts to contact Minister of Power and Energy Kanchana Wijesekera and Power and Energy Ministry Secretary M.P.D.U.K. Mapa Pathirana for further information on the matter proved futile. In early June, the PTUC warned that the refinery would have to be closed again, as no crude oil had been ordered to be delivered to Sri Lanka by the end of the said 90,000 MT of crude oil, but that stock of crude oil would only be sufficient for a period of about 20 days. Palitha said at the time: “At the end of that stock, Sri Lanka needs to get a stock of crude oil back if the refinery is to continue operations. However, no agreement has yet been signed to obtain such a stock.”  When contacted at the time, Mapa Pathirana stated that steps would be taken to bring in another consignment of crude oil to Sri Lanka within 14 days from the date of the resumption of refining operations at the refinery (1 June). “We will bring back another consignment within 14 days. In addition, we have planned another option too. We will not allow another suspension of Refinery operations.” When questioned as to what that option is, he said that it was difficult for him to explain it to the media at that juncture. Palitha yesterday commented on Mapa Pathirana’s statement that there is an option to continue the refinery’s operations. Palitha said: “The only way to keep the refinery running without shutting down is to supply enough crude oil to it. Without that, it is not possible to operate the refinery. The option he is talking about may be to remove the refinery from the purview of the Ceylon Petroleum Corporation and to hand it over to a private company.”  In March, the Sapugaskanda Oil Refinery was closed indefinitely due to the shortage of crude oil, which was caused by the US dollar deficit in the country. The refinery had to suspend its operations on two previous occasions due to the same issue. 


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