BIZ

Sri Lanka-Iran ‘tea-for-oil’ barter agreement progresses with over $20 million settled

Published

1 year ago

February 1, 2024

nipuni

The ongoing Sri Lanka and Iran ‘tea-for-oil’ barter agreement is now making strong progress and Sri Lanka has already settled over USD 20 million to Iran.

“This agreement was to settle a total of USD 250 million for purchases made by Ceylon Petroleum Corporation (CPC) for oil imported from Iran in 2012”, said Chairman Sri Lanka Tea Board (SLTB) Niraj De Mel in a special interview with ‘Daily News Business’.

In a bid to save draining of foreign exchange from Sri Lanka to service the high petroleum imports the then Minister of Finance, Mangala Samaraweera and Dr. Romesh Pathirana talked to National Iranian Oil Company of Iran officials since 2019 to trade tea instead of paying in USD when purchasing fuel to protect local forex reserves.

The barter was agreed in 2021 for oil imported in 2012 however due to the economic crisis this deal was only signed last year.

“Since then we have made very strong progress and up to December 2023 we have settled around USD 20 million.”

Explaining the modalities of the agreement he said that the local tea exporters to Iran get paid in Sri Lanka rupees by the Ceylon Petroleum Corporation.

SLTB will be settling payments to Sri Lanka tea exporters upon confirmation of tea consignments are shipped to Iran by the tea exporters. This is scrutinized through a recognized Audit Firm.

“The agreement is to send USD 5 million worth of tea each month to Iran for 48 months.”

De Mel said that with Iran facing a cold climate in the next few months we expect the demand for local tea to increase.

“Hence we have requested the Minister of Power and Energy Kanchana Wijesekera to increase the monthly USD 5 allocation (equivalent to Sri Lankan rupees) made by them to local tea exporters. We have requested the Minister to increase this to USD 10 million and he has responded to this request positively.”

De Mel said that though there are some international restrictions imposed on Iran this ‘tea-for-oil’ barter agreement does not violate it.

“This scheme will not violate any UN or US sanctions since tea has been categorized as a food item under humanitarian grounds while none of the black listed Iranian banks will be involved in the equation.”

The total revenue realized for the period January – December 2023 from tea exports was USD 1.31 billion compared with USD 1.27 Billion recorded for the period January to December 2022.

The increase of tea exports was USD 1.31 billion compared to the same period in 2022.

BIZ

Imported milk powder prices upped

Published

19 hours ago

July 10, 2025

editor

The price of a 400g pack of imported milk powder has been raised by Rs.100, according to the Milk Powder Importers’ Association.

Previously priced at Rs.1,100, the new cost for a 400g pack is now Rs.1,200.

BIZ

No cases filed against 22 banned pyramid schemes – CBSL

Published

2 days ago

July 9, 2025

editor

Although the Central Bank of Sri Lanka (CBSL) has banned 22 institutions operating illegal pyramid schemes, no legal action has been taken against any of them so far, according to reports.

This was disclosed during a workshop held at the CBSL yesterday (July 08) on the dangers of pyramid schemes.

According to CBSL officials, after initial investigations, the files were handed over to the Criminal Investigation Department (CID) for further inquiry.

The CID’s Financial Crimes Unit has reportedly completed its investigations and submitted findings to the Attorney General’s Department, which is responsible for filing cases.

However, it was noted that not a single case has been filed to date.

The CBSL states that investigations will be continued against companies engaged in these illegal practices and hopes at least one or two such cases would be filed by the end of this year or early next year (2026).

BIZ

Bowser owners warn of fuel distribution crisis

Published

2 days ago

July 9, 2025

editor

The Ceylon Petroleum Private Bowser Owners’ Association has alleged that fuel distribution operations have been arbitrarily handed over to another party, which could disrupt fuel transportation across the country.

The association’s Treasurer – Jagath Parakrama warned that the move could jeopardize distribution if not reversed immediately, claiming there is an attempt to create a monopoly over fuel transport.

Parakrama noted that bowser owners, numbering around 400–500 in the association, have long handled the transport of fuel from bulk storage depots island-wide.

He alleged that authorities are now trying to award the fuel transportation route from Colombo and Muthurajawela to Kurunegala to a single businessman via a tender process.

He added, “If we don’t transport the fuel, no one else will be able to do so. However, in the last two or three years, this business was about to be handed over to a few large-scale business people. We, as an association, intervened and managed to stop it for a long time. But now, they are trying to hand over this transportation service to their close associates.”

He stressed that fuel transportation should remain a public service, warning that allowing a monopoly could lead to issues similar to those faced by other transport services.