Sri Lanka’s fuel import expenditure is expected to decline significantly by July, provided global oil prices remain stable or continue to fall, Ceylon Petroleum Corporation (CPC) Chairman D.J. Rajakaruna said.
Speaking on the country’s fuel import costs, Rajakaruna said Sri Lanka recorded a sharp increase in fuel-related dollar outflows in recent months due to high international prices and additional fuel imports required for electricity generation.
“On average, the CPC used to spend around US$100 million a month on fuel imports. However, that figure rose to US$522 million in April, which was paid in May. In fact, last month saw the highest amount of dollars leaving the country for fuel purchases,” he said.
Rajakaruna noted that 11 fuel shipments were imported during April, all at elevated market prices.
“In April alone, we brought in 11 shipments, all purchased at higher prices. We also had to import an additional diesel shipment solely for electricity generation, and that cargo was purchased at a high price. That was the main reason for the increase in dollar expenditure,” he said.
Despite the increase, Rajakaruna said the CPC has already managed to reduce monthly fuel import costs.
“The expenditure that had risen to US$522 million has now come down to around US$318 million this month. Our projection is that it can be reduced further to about US$198 million by July,” he said.
He attributed the expected reduction to improved crude oil supplies for the Sapugaskanda refinery.
“We have now received all the crude oil required for our refinery operations,” Rajakaruna said.
The CPC Chairman said current trends in the global market indicate diesel prices are gradually declining, which would help Sri Lanka manage its fuel import costs without difficulty.
“Based on current market trends, diesel prices are gradually decreasing in the global market. If prices remain at current levels or fall further, we should be able to manage these costs without any major issues. That is our plan,” he said.
However, Rajakaruna cautioned that the outlook beyond July would depend on developments in international markets and geopolitical tensions.
“At the moment, we have a clear picture up to July. Beyond that, we will have to monitor global market prices. If prices rise again or if the conflict escalates further, we will need to hold discussions with the IMF and decide on the next course of action,” he said. (Newswire)