Balance-of-payment crisis continues to stagger govt.
By Shamindra Ferdinando
The United Arab Emirates (UAD) has agreed to discuss a possible arrangement to provide Sri Lanka crude oil on concessionary terms in the face of the country experiencing a severe balance-of-payments crisis, according to the Foreign Ministry.
Foreign Minister Prof. G.L. Peiris took up the matter with UAE Minister of Industry and Advanced Technology Dr. Sultan Al Jaber, on the sidelines of the 76th session of the United Nations General Assembly (UNGA) in New York. Prof. Peiris is on President Gotabaya Rajapaksa’s delegation to the UNGA.
In late August, Energy Minister Udaya Gammanpila sought the intervention of the Acting Head of the UAE Embassy in Sri Lanka, Saif Alanofy. Minister Gammanpila also met the Iranian Ambassador in Colombo in a bid to explore the possibility of obtaining oil from Iran on concessionary arrangements.
The Foreign Ministry statement on Prof. Peiris meeting with the UAE Minister dealt with the financial crisis experienced by the country. “Foreign Minister Peiris explained the challenges Sri Lanka is experiencing in respect of its external budget, as a result of the COVID-19 pandemic. Prof. Peiris focused in particular on the country’s requirement for oil and requested concessionary arrangements from the UAE.”
The Foreign Ministry quoted Minister Al Jaber as having said that the UAE would be happy to assist and proposed the establishment of a strategic framework to take the process forward.”
The ministry stressed that both sides agreed to follow-up rapidly.
Energy Minister Udaya Gammanpila earlier told The Island that concessionary arrangements were required to procure oil as part of an overall strategy to overcome the developing crisis.
Pivithuru Hela Urumaya (PHU) leader and Attorney-at-law Gammanpila said that increase in fuel prices in the second week of June this year was only a part of the government’s response to heavy pressure on foreign reserves. Minister Gammanpila said that the decision was taken close on the heels of dire warning from the Central Bank.
Minister Gammanpila said that in spite of foreign currency crisis, the government ensured an uninterrupted supply of fuel. According to him, Sri Lanka spent as much as USD 3.5 to 5 bn annually on oil imports depending on the world market prices.