Facing cash crunch, Sri Lanka to get 90,000 tonnes of Russian light crude oil

Ceylon Petroleum Corporation, the state-run refinery was shut in March due to the foreign exchange crunch, which left the government being unable to finance crude imports. The Russian crude oil delivery has been waiting offshore at Colombo's port for over a month as the island nation was unable to raise $75 million to pay for it.

Sri Lanka on Saturday received Russian oil in a bid to restart operations in the island nation's only refinery, AFP quoted the country's energy minister Kanchana Wijesekera. The country is facing its worst economic crisis since independence with the people on streets over acute shortage of essentials and fuel since the past 50 days. 

Women wait near an empty fuel station hoping to buy kerosene oil for cooking in Colombo, Sri Lanka. Sri Lankans for months have been forced to stand in long lines to buy scarce essentials, with many returning home empty-handed. (AP)

Ceylon Petroleum Corporation, the state-run refinery was shut in March due to the foreign exchange crunch, which left the government being unable to finance crude imports. The Russian crude oil delivery has been waiting offshore at Colombo's port for over a month as the island nation was unable to raise $75 million to pay for it.

AFP has learnt that Colombo is in talks with Moscow to arrange direct supplies of crude, coal, diesel and petrol despite the US-led Western sanctions on Russian banks over its invasion of Ukraine.

"I have made an official request to the Russian ambassador for direct supplies of Russian oil," Wijesekera said, adding that crude alone cannot fulfil the requirement as the country need other refined products too," the minister said. 

Around 90,000 tonnes of Siberian light crude will be sent to Sri Lanka's refinery after the shipment was acquired on credit from Dubai-based intermediary Coral Energy.

Wijesekera said Ceylon Petroleum Corporation (CPC) was already in arrears of $735 million to suppliers and no one came forward to even bid for its oil tenders. The minister added that the Siberian grade was not an ideal match for the refinery, which is optimised for Iranian light crude, but no other supplier was willing to extend credit.

The government will call for fresh supply tenders in two weeks before the stock of Siberian light runs out.

The Sapugaskanda refinery on Colombo's outskirts will resume work in about two days.

Nationwide anger continues against embattled president Gotabaya Rajapaksa as the anti-government protests entered the 50th day. Demanding the president's resignation, the organisers of the protests have declared they would intensify the agitation with more participation. 

(With AFP inputs)