ECONOMYNEXT – State-run Sri Lanka Transport Board will pump fuel for privately owned buses from Monday, as forex shortages coming from money printed by the central bank to maintain low interest rates made it difficult to import oil.

Chirman of state-run Ceylon Petroleum Corporation Sumith Wijesinghe said the firm had started delivering fuel to SLTB pumping stations following discussion with newly appointed transport minister Dilum Amunugama.

Private bus owners had requested fuel from SLTB to avoid being in queues with the rest of the public.

“There are 1200 CEYPETCO fuel stations and 210 IOC fuel stations,” Wijesinghe said. “We gave the facility for the bus owners to get diesel from these stations.

“We had the discussion on Friday (4), and we have started deploying fuel for CTB fuel stations and by Monday or Tuesday we will be able to complete it.”

Sri Lanka is facing delays in unloading fuel due to foreign exchange shortages coming from money printed by the central bank. The central bank has been giving reserves for imports at a 200 to the US dollar peg, but has been printing money at 6.5 percent to prevent rates from going up.

Last week the rate was hiked to 7.5 percent. Money is also being printed to given a 8 rupee per dollar subsidy to expat workers sending dollars through banking system, which boost imports and boomerang on the reserves of the central bank.

Further rate hikes and float of the currency is needed to end forex and fuel shortages, analysts say.

There have been calls to change the governing law of the central bank to prevent its domestic operations department from printing money to keep interest rates artificially low, trigger currency crises and social unrest.


Sri Lanka central bank hikes policy rate 100bp to counter forex crisis

Meanwhile Wijesinghe said, fuel supply for the agricultural areas will also be boosted.

” The agriculture minister requested us to provide adequate fuel for the agriculture areas in the country,” Wijesinghe said.

“With that we deployed fuel for those areas, not only in western province but also in other areas as well. From yesterday till tomorrow we will deploy these fuels.”

The general public was stocking more fuel than in the past and are also running generators, boosting demand.

“People are using more fuel than they usually started stacking up extra fuel in cans and barrels. This is the cause for shortage of fuel in the country” Wijesinghe claimed

“We have now started unloading fuel for the consumption in the country. And the ques are getting shorter and by the end of the day it will settle.

“We did not say that we don’t have enough fuel since we had enough fuel for the daily consumption with us. So we ask the general public to not to panic and use fuel as usual.”

Wijesinghe said, from each fuel ship, CPC received 35- 40,000 metric tons and for the monthly consumption Sri Lanka needs around 200,000 metric tons of Diesel.

Asking the general public to preserve fuel without overconsumption, he said, the price of fuel has gone up to a record high in the international market, mainly due to Russia – Ukraine conflict.

However, Wijesinghe said, CPC has ordered the necessary amount of all types of fuel for daily consumption.

“And on next Monday and Tuesday we will receive more diesel consignments. And all the fuel we need, including furnace oil, Jet AL, Diesel and etc we have placed orders” Wijesinghe said.

“We responsibly say there won’t be any shortage of fuel in the coming days.”

Commenting on the ongoing power crisis due to shortage of furnace oil and diesel, Wijesinghe said, as agreed in the discussions held with Ministers of Power and Electricity, CPC will start supplying necessary furnace oil and diesel stocks from Monday onwards.

“We are having meeting on Saturday (5) and we will finalize on how to continuously supply the necessary fuel to CEB” WIjesinghe said.

“CEB said, with demand decreases in the weekend, it can be managed with the current stocks they have and from Monday onwards we will supply the needed diesel and furnace oil for power generation without any interruption”. (Colombo/ March 5/2022)