May 20, 2022
Sri Lanka Hunts for Cash to Pay Oil Traders for Crude and Fuel
(Bloomberg) -- Sri Lanka is trying to come up with cash to pay for oil that’s been sitting on tankers off its coast, amid the south Asian country’s worst economic crisis in a generation.
Unloading procedures for one cargo of gasoline have begun but the ship cannot berth yet because there’s no space for it to do so, according to the harbor master at the port of Colombo. Meanwhile, Prime Minister Ranil Wickremesinghe said the government is also trying to find the cash to complete a rare purchase of crude oil from Russia.
Sri Lanka is mired in the worst financial crisis of its independent history, facing shortages of everything from food to oil. Fuel supplies are so low that the government told citizens not to queue for gasoline at filling stations.
The tanker Torm Adventurer is holding almost 300,000 barrels of the fuel. The captain of the tanker had been awaiting confirmation payment has been made before allowing unloading to begin.
The government is buying the gasoline from Vitol Group, the world’s largest independent oil trader, Wickremesinghe said. Vitol didn’t immediately comment.
The harbor master said the gasoline has been paid for. As of Thursday, the Prime Minister said it had not been. On Wednesday, energy minister Kanchana Wijesekera said Sri Lanka owed a supplier $53 million for a shipment of gasoline. It’s unclear if he was talking about the Vitol cargo.
Wickremesinghe said funds have yet to be found for the crude. Other countries, particularly in Europe, have increasingly turned away from dealing with Moscow following the invasion of Ukraine and a growing risk of sanctions.
The crude oil consignment is about 90,000 tons of the Siberian Light grade from Russia, according to the Prime Minister. Vessel tracking and port data suggest a slightly smaller cargo than that, which got exported from the Russian Black Sea port of Novorossiysk.
Sri Lanka needs all the help in the oil market that it can get. Its gasoline stocks are running dangerously low, with the government working to obtain dollars in the open market to pay for resupplies.
READ: Sri Lanka Default Hints at Trouble Ahead for Developing Nations
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