COLOMBO, May 28 (Reuters) - Sri Lanka will pay $72.6 million
to buy a 90,000-tonne shipment of Russian oil docked at
Colombo's port for weeks, its energy minister said on Saturday,
as the island nation works to restart its only refinery and
address a crippling energy crisis.
Sri Lanka has struggled to pay for fuel, food and medicine
imports due to a severe shortage of foreign currency. An
unprecedented financial crisis has also forced the country to
default on some external debt.
Like the rest of Asia, Sri Lanka wants to shift to long-term
crude tenders to hedge against high crude spot prices, but
dwindling foreign exchange reserves have hampered its ambitions,
the power minister said on Saturday.
"I have reached out to multiple countries, including Russia,
for support to import crude and other petroleum products," Power
and Energy Minister Kanchana Wijesekera told reporters.
The 90,000-tonne consignment was ordered through Dubai-based
Coral Energy, Wijesekera said, adding that the payment would
facilitate restarting the country's sole refinery, which has
been closed since March 25.
"The next shipment will also be ordered from the same
company. Another consignment will be needed within the next two
weeks to keep the refinery running continuously," Wijesekera
Queues of two-wheelers and cars outside fuel stations,
sometimes miles long, have become a familiar sight for Sri
Lankans this year, with high global oil prices exacerbating
Wijesekera estimates that Sri Lanka will need $568 million
to pay for a dozen fuel shipments needed in June.
The country is struggling to pay $31 million for a furnace
oil shipment docked at Colombo's port. State-run Ceylon
Petroleum Corporation (CPC) needs $735 million to clear letters
of credit for previous oil purchases.
Total foreign reserves were $1.82 billion at the end of
Protests have rocked Sri Lanka in recent days, with
demonstrators demanding the resignation of President Gotabaya
Rajapaksa over the financial crisis.
($1 = 359.0000 Sri Lankan rupees)
(Reporting by Uditha Jayasinghe
Editing by Sudarshan Varadhan and Helen Popper)