ECONOMYNEXT – Sri Lanka’s Energy Minister Kanchana Wijesekera said he met Central Bank Governor Nandalal Weerasinghe on discuss foreign exchange needs to import oil for June as the country faces forex shortages due to money printing.

State-run Ceylon Petrolem Corporation needs 554 million US dollars to import oil in June and and 100 million US dollars is provided through the Indian Credit line, he said.

A 500 million US dollar facility is also being discussed, he said.

As of 12 noon on May 30, Sri Lanka had 14,433 metric tonnes of diesel, 58 tonnes of super diesel, 41,975 metric tonnes of petrol, 14,041 metric tonnes of 95 octane petrol and 1,621 metric tonnes of Jet fuel.

Another diesel shipment is due to arrive at 1800h on May 30, he said.

Sri Lanka’s sole refinery which processes about 35,000 barrels a day has re-started operations also on May 30.

Sri Lanka this week bought a consignment of Siberian light crude for the refinery for which payments will be done in August.

Sri Lanka is facing the worst currency crisis in the history of the island’s 72-year intermediate regime central bank.

When the central bank prints money to control a policy rate through open market operations or directly finance the deficit, or to reject bids for Treasury bill auctions, the currency comes under pressure and the credibility of the peg breaks and there are forex shortages. (Colombo/May30/2022)