Although the United States has permitted Sri Lanka to import a restricted amount of crude oil from Iran, the embargo on the Iranian government-owned National Iranian Oil Company (NIOC) prevents such imports from Iran.
This has compelled the Ceylon Petroleum Corporation (CPC) to temporarily shut down the Sapugaskanda Oil Refinery (SOR).
Petroleum Industries Minister Susil Premajayantha told Daily Mirror yesterday the US State Department had permitted the import of 10 consignments of 135,000 metric tonnes each of Iranian light crude. But he said this was not possible because of the US embargo, which was still in place.
“The total annual requirement of SOR is 14 consignments of 135,000 metric tonnes each supplied by Iran. After the US State Department enforced an oil embargo on Iran in June, we downsized the imports to 10 consignments with US approval. But we are unable to import even a drop of oil from Iran because of the embargo on National Iranian Oil Company (NIOC),” the minister said.
He said an oil tanker sent to Iran to bring a consignment of Iranian light crude last month had to return empty as NIOC was not permitted to load the cargo which led to the SOR shut down.
“Due to the US embargo we can’t obtain re-insurance and open LCs,” the minister said.
However, he hoped the CPC would be able to resume operations at the SOR after a consignment of crude oil from Oman arrives at the Colombo Port on November 8.
The minister said agreements had been signed with Saudi Arabia and Oman for the uninterrupted supply of crude oil for the next two to three months.
He said the CPC would give up spot buying and would sign contacts for long term bulk buying from countries such as Saudi Arabia and Oman.
“The priority will be given to state owned oil suppliers like ARAMCO so as to prevent malpractice,” the minister said and added that a dialogue had been initiated with the US State Department with the objective of relaxing the Iran embargo with regard to Sri Lanka in the same way that it was granted to Japan and China.
Meanwhile, the minister met visiting Saudi Arabian Finance Minister Abdulaziz Al Assaf last afternoon. The discussions would be mainly focused on Sri Lanka purchasing a bulk of its fuel requirements from the main oil producer in the world on a concessionary basis. (Sandun A. Jayasekera)