Crisis-stricken Sri Lanka gets Russian oil to ease shortages
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In light of Sri Lanka's greatest economic crisis, Russia is sending oil to ease the nation's suffering.
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Sri Lanka gets Russian oil to ease shortages. (Reuters)
Sri Lanka received Russian oil on Saturday, which could soon be subject to a European embargo, in order to restore operations at the country's sole refinery, according to the energy minister.
The island nation is experiencing its greatest economic catastrophe since independence, with fuel and other essential goods shortages making life unpleasant for its 22 million people.
The state-owned Ceylon Petroleum Corporation (CPC) refinery was closed in March as a result of Sri Lanka's currency crisis, which rendered the government unable to fund crude imports.
The Russian oil consignment has been waiting offshore of Colombo's port for more than a month since the country was unable to raise $75 million to pay for it, according to energy minister Kanchana Wijesekera.
Moscow-Colombo talks
Despite US-led sanctions on Russian banks and a diplomatic outcry over Russia's operation in Ukraine, Colombo is in talks with Moscow to arrange a direct supply of petroleum, coal, diesel, and gasoline.
"I have made an official request to the Russian ambassador for direct supplies of Russian oil," Wijesekera told reporters in Colombo.
"Crude alone will not fulfill our requirement, we need other refined (petroleum) products as well."
After being obtained on credit from Dubai-based intermediary Coral Energy, about 90,000 tonnes of Siberian light crude will be shipped to Sri Lanka's refinery.
Read next: The Sri Lankan economic crisis
According to Wijesekera, Ceylon Petroleum Corporation (CPC) is already $735 million in arrears to suppliers, and no one has come forward to bid on its oil tenders.
He went on to say that the Siberian quality was not an ideal match for the refinery, which is designed to process Iranian light crude, but no other supplier was ready to give credit.
Nonetheless, Wijesekera stated that Sri Lanka will issue new supply tenders in two weeks before the stock of Siberian light runs out. The Sapugaskanda refinery on the outskirts of Colombo will reopen in roughly two days.
EU pressure on Russia
European Union officials will gather on Monday to discuss more measures against Russia related to the Ukraine war, including an oil embargo.
Russian oil is already subject to a US embargo, and its barrels have been trading at a significant discount to international benchmarks, which have risen significantly since the crisis began.
Long lines of motorists have formed outside gas stations in Sri Lanka as a result of the country's economic crisis, with people waiting hours, if not days, for scarce supplies of petrol and cooking gas.
Read next: Ukraine crisis could sink US efforts to stabilize oil prices: Official
Its inhabitants are also dealing with severe shortages of imported food and pharmaceuticals, as well as record inflation and protracted daily blackouts.
Anti-government rallies turned into violence earlier this month, killing nine people and injuring many more.
