Dec 19, 2021

SriLankan Airlines told to pay for jet fuel in dollars - or else

The Energy Ministry has officially informed SriLankan Airlines that it will not supply jet fuel if the payment is not made in dollars.

Energy Ministry Secretary K. D. R. Olga said the ministry officially conveyed its decision last week and told the national carrier to make the dollar payments to the Ceylon Petroleum Corporation (CPC) through the state bank network.

“If we are to supply jet fuel, we need dollars. We have been telling the airline about this for some time. But last week we informed it officially. The airline earns dollars. Therefore, if we are to clear shipments, we informed the company that it has to send dollars to the state bank system,” she said. The secretary said the airline and several state institutions such as the Ceylon Electricity Board (CEB) continued to buy fuel on credit and as a result the CPC’s financial burden was increasing.

Earlier in the week, a ship carrying 40,000 metric tonnes of jet fuel arrived in the country and the stock is sufficient to meet the demand only up to January 20, a top official of the Ceylon Petroleum Storage Terminal Limited (CPSTL) said.

Meanwhile, CPSTL sources said that since the country would run out of crude oil for refining, the Sapugaskanda refinery would once again be closed down from January 3. The plant remained closed from November 15 to December 7, for the first time in its history, due to non-availability of crude stocks.

When asked about this, Ms. Olga said a crude oil shipment was due after January 25 and until such time, they might have to close down the refinery.

“Petrol and diesel can be bought at short notice. However, to buy crude oil, the supplier has to secure the ship 90 days ahead and book the cargo. Moreover, due to the economic crisis in the country, the supplier demands the full payment upfront. The problem has arisen because a successful bid was not submitted in response to our recent tenders,” she said.

She said the Sapugaskanda plant had been designed to refine the Murban crude oil and therefore, there was a need to identity other types of crude oil which could be refined at Sapugaskanda and call for tenders. If this process succeeded it would be possible to operate the refinery continuously, she said.