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TUESDAY, October 04, 2022
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Sri Lanka may have to rely on Russia for fuel, says PM

Sri Lanka may have to rely on Russia for fuel, says PM

MONDAY, June 13, 2022

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 foreign press on Saturday, Wickremesinghe said he would first look for other sources but would be open to buying more crude oil from Russia. He pointed out that Sri Lanka desperately needs fuel and is trying to get oil and coal from the country’s traditional suppliers in the Middle East.

The PM also said that he does not know whether more orders were in the pipeline.“If we can get from 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 supplier.”

Acknowledging that Sri Lanka’s current predicament was of “its own making,” the premier said the Russia-Ukraine war was making it even worse — and that the dire food shortage could continue until 2024.

He said Russia had also offered wheat to Sri Lanka. Wickremesinghe indicated that he would be willing to accept more financial help from China despite the country’s mounting debt.

The premier added that his government was in talks with China about restructuring its debts. Beijing had earlier offered to lend the country more money but baulked 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 the 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 seen anything like this in Sri Lanka before and hoped he never 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.”

The Island

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Sri Lanka may have to rely on Russia for fuel, says PM