News
Mounting oil bills hit economy; Ministry forced to stop spot purchases
Mounting fuel bills have forced the government to abandon the practice of spot purchases from tomorrow and revert to tender procedures to obtain the country’s fuel requirements, Petroleum Minister Susil Premajayantha said yesterday.
He said only registered suppliers would be allowed to bid when tenders were called.
The move came as the Treasury warned that a staggering US$ 400 million (around Rs. 52 billion) oil import bill each month had begun to hurt the economy. A senior Finance Ministry official said the fuel bill was the main cause for the widening trade deficit. The Ceylon Petroleum Corporation, the official said, had created foreign exchange shortages by not generating enough rupees from its petroleum sales, running into losses and then trying to buy dollars with borrowed money.
He said Sri Lanka could save US$ 20 on a barrel of oil a day if it refined crude oil at Sapugaskanda and there was an urgent need to repair this “always breakdown” refinery. This was brought to the notice of the ministry by the Treasury Secretary, but little action had been taken.
In the past 15 months thousands of vehicle owners have been hit by import of contaminated or adulterated fuel.
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