State Minister assures enough petroleum stocks until June next year

State Minister of Power and Energy, D.V. Chanaka, assured the public on Thursday (19) that there is no imminent risk of a fuel shortage in Sri Lanka. He explained that Sri Lanka’s fuel imports remain unaffected by the ongoing conflict between Israel and Palestine.

Chanaka emphasized that tenders for fuel imports needed until June 2024 have already been successfully completed, ensuring a continuous supply of fuel during that period. The government’s decision to entrust the supply of fuel to China’s Sinopec is expected to result in substantial foreign exchange savings, estimated to be over 500 million U.S. Dollars.

During a press briefing at the Presidential Media Centre (PMC) under the theme ‘Collective Path to a Stable Country,’ State Minister D.V. Chanaka highlighted the recent fuel crisis faced by the country, with shortages and long queues at gas stations. However, he mentioned that this situation was resolved swiftly.

He pointed out the fluctuation in crude oil prices in the global market, with prices varying from $50 per barrel in January 2022 to $100 per barrel due to factors such as the Russian-Ukrainian conflict. While there was a slight decrease in crude oil prices earlier this year, recent events in the Gaza Strip led to a 4% increase in fuel prices worldwide, offsetting the relief from falling crude oil prices. Although Israel and Palestine are not major fuel producers or distributors, the potential involvement of Iran added to the global market’s uncertainty.

Chanaka emphasized that despite these global conflicts, Sri Lanka’s fuel imports have continued without disruption. The government has also allowed three other suppliers, including China’s Sinopec, to provide fuel to the country. Sinopec has already commenced operations in Sri Lanka, resulting in savings of approximately 40 million USD in foreign exchange per season. These measures are expected to contribute to saving more than 500 million USD in foreign exchange annually.

Furthermore, these actions have helped reduce the risk to the dollar reserves held by the Ceylon Petroleum Corporation, and efforts are underway to pass on these benefits to consumers. Chanaka also mentioned the establishment of a reserve of 200 million USD for oil purchases, a noteworthy step in Sri Lanka’s energy security.