PM: More oil may have to be bought from Russia

Prime Minister Ranil Wickremesinghe has said Sri Lanka may be compelled to buy more oil from Russia to deal with the present fuel crisis.In an interview with the foreign press, Premier Wickremesinghe said on Saturday that he would first look for other sources, but would be open to buying more crude from Russia.The Premier said Sri Lanka desperately needed fuel, and was currently trying to get oil and coal from the country’s traditional suppliers in the Middle East.

The Prime Minister said he did not know whether more orders were in the pipeline.

“If we can get from any other sources, we will get from there. Otherwise (we) may have to go to Russia again,” he said.

Officials are negotiating with private suppliers, but Wickremesinghe said one issue they faced was that “there is a lot of oil going around which can be sourced back informally to Iran or to Russia.”

“Sometimes, we may not know what oil we are buying,” he said. “Certainly, we are looking at the Gulf as our main supply.”

Acknowledging that Sri Lanka’s current predicament was of “its own making,”

the Prime Minister said the war in Ukraine was making it even worse — and that dire food shortages could continue until 2024. He said Russia had also offered wheat to Sri Lanka.Wickremesinghe indicated he would be willing to accept more financial help from China despite the country’s mounting debt.The Prime Minister said his government had been talking with China, about restructuring its debts. Beijing had earlier offered to lend the country more money but balked at cutting the debt, possibly out of concern that other borrowers would demand the same relief.

“China has agreed to come in with the other countries to give relief to Sri Lanka, which is a first step,” Wickremesinghe said. “This means they all have to agree (on) how the cuts are to take place and in what manner they should take place.”

Sri Lanka is also seeking financial assistance from the World Food Programme, which may send a team to the country soon, and Wickremesinghe is banking on a bailout package from the International Monetary Fund. But even if approved, he doesn’t expect to see money from the package until October onwards.Wickremesinghe acknowledged that the crisis in Sri Lanka had been of its “own making.” Many have blamed government mismanagement, deep tax cuts in 2019, policy blunders that devastated crops and a sharp plunge in tourism due to the coronavirus pandemic. But he also stressed that the war in Ukraine, which had thrown global supply chains into a tailspin and pushed fuel and food prices to unaffordable levels, has made things much worse.

“The Ukraine crisis has impacted our … economic contraction,” he said, adding that he thinks the economy will shrink even further before the country can begin to recoup and rebuild next year.

“I think by the end of the year, you could see the impact in other countries” as well, he said. “There is a global shortage of food. Countries are not exporting food.”

Wickremesinghe said he felt terrible watching his nation suffer, “both as a citizen and a Prime Minister.” He said he hasn’t ever seen anything like this in Sri Lanka — and didn’t think he ever would. “I have generally been in governments where I ensured people had three meals and their income increased,” he said. “We’ve had difficult times. … But not like this. I have not seen … people without fuel, without food.”