Sri Lanka out of cash to buy oil: minister

Published February 19, 2022
Sri Lankan Energy Minister Udaya Gammanpila. — Photo via Tamil Guardian/File
Sri Lankan Energy Minister Udaya Gammanpila. — Photo via Tamil Guardian/File

COLOMBO: Sri Lanka’s state-run petroleum company has run out of cash to buy oil, and fuel shortages across the country could get worse, the energy minister said Friday.

Udaya Gammanpila said the loss-making Ceylon Petroleum Corporation (CPC) continued to haemorrhage cash and could no longer afford to procure supplies from abroad.

“Earlier, we were short of dollars to import oil. Now we don’t have the rupees to buy the dollars,” Gammanpila told reporters in Colombo.

Diesel is the most commonly used fuel for public transport, and motorists outside the capital have reported long queues at understocked pumps.

Several thermal power stations, meanwhile, closed Friday afternoon after running out of fuel, leading Sri Lanka’s energy utility to announce the resumption of rotating power cuts across the country.

Gammanpila said the CPC suffered losses of up to 42 per cent on the sale of diesel at government-mandated prices, with losses of 83 billion rupees ($415 million) last year alone. “Even if taxes are lifted on oil sales, it is not enough to cover our losses,” he said. “A severe shortage is inevitable unless we increase prices or the treasury offers a bailout.” There was no immediate comment from the finance ministry.

Sri Lanka’s worsening foreign-exchange shortage has seriously impacted the energy sector, which depends entirely on imports for its oil needs.

Published in Dawn, February 19th, 2022

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

A grave tragedy
Updated 08 Feb, 2023

A grave tragedy

It is hoped that Pakistan continues to send as many personnel and relief goods as needed to Turkiye, Syria.
Pharma shutdown
08 Feb, 2023

Pharma shutdown

IN the midst of an economic and political maelstrom, a fresh crisis threatens the availability of drugs in the...
PSL season
08 Feb, 2023

PSL season

THE exhibition match between Quetta Gladiators and Peshawar Zalmi at Quetta’s Bugti Stadium has set the tone for...
No pardon for rape
Updated 07 Feb, 2023

No pardon for rape

Cultural filters and biases can often lead to faulty applications of the law.
Health insurance
07 Feb, 2023

Health insurance

THE planning ministry is reported to have raised objections to Punjab’s flagship universal health coverage...
The people’s demands
07 Feb, 2023

The people’s demands

AS the people of KP are literally on the frontline of the battle against terrorism and violent extremism, they are...