Sri Lanka chooses Chinese currency to pay for Russian oil transactions

By Kelum Bandara  

Sri Lanka, which is planning to purchase crude oil from Russia, has agreed to settle payments in Chinese Renminbi (RMB), newly appointed Energy Minister Aruna Karunatilake said.  

He was sworn in as Energy Minister by President Anura Kumara Dissanayake after Mr. Kumara Jayakodi stepped down pending investigations into alleged fraud and irregularities in the import of coal for power generation.   The new minister assumed duties on Tuesday. Speaking to *Daily Mirror*, he said his immediate focus is to ensure an uninterrupted supply of fuel and electricity as the country grapples with the fallout from the Middle East conflict.  

The minister said fuel stocks have been secured to ensure an uninterrupted supply until the end of July this year.  

“We will work out modalities for continuous supply beyond that,” he said.  

Asked about the move to purchase oil from Russia, he said discussions are still ongoing.  

“We expect to finalise the deal after another two rounds of talks,” he said.  

The United States has renewed a waiver allowing countries to purchase sanctioned Russian oil at sea for about a month. The US Treasury Department’s waiver permits the purchase of Russian oil and petroleum products loaded on vessels as of Friday, valid through May 16.  

Sri Lanka is currently discussing logistical arrangements, including unloading at ports and the payment mechanism. The RMB has been selected as the settlement currency for transactions with Russian companies, with detailed arrangements still under discussion, according to the minister.  

 The conflict in the Middle East has triggered a major shock to global energy markets. The effective closure of the Strait of Hormuz has caused one of the largest supply disruptions in the history of oil markets, significantly affecting supplies of natural gas and other energy-related commodities, the International Energy Agency said.