Sri Lanka is studying several alternatives to mitigate the impact on its oil imports due to US sanctions on Iran.
Petroleum Minister Susil Premajayantha said the Ceylon Petroleum Corporation (CPC) would continue on the ‘spot’ open market purchases of fuel, on tender or ‘term’ contract basis, in small to medium size stocks of 20,000 to 40,000 MT.
He said the CPC was now buying refined fuel through tenders as the capacity at Sapugaskanda oil refinery was 35,000-40,000 barrels a day. It was buying 30% of its requirement through spot markets and the balance through forward contracts.
The minister said Sri Lanka was buying refined petroleum products from Singapore, the United Arab Emirates and India. Talks were underway with Saudi Arabia and Oman to buy the country’s requirement of crude oil.
A senior CPC official said the government was also exploring the possibility to continue crude oil purchases from Iran by paying in some currency other than US dollars.
He added US official Treasury Deputy Assistant Secretary Luke Brunnen who visited the country recently had indicated that Sri Lanka could carry out transactions with Iran in Indian rupees or other currencies.
He said Sri Lanka was looking at changes in payment modes when continuing transactions with Iran following the lead of other Asian nations. The total Sri Lanka domestic petroleum market is about 4.4 million MT a year and growing at around 10% annually.