Sri Lanka allows oil-producing nations to import, sell fuel

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Sri Lanka allows oil-producing nations to import, sell fuel

ERANGA JAYAWARDENA AP PHOTO COLOMBO Sri Lanka will allow oil-producing countries to import and sell fuel, the power and energy minister said on Tuesday, ending a duopoly as it attempts to address a shortage of petrol and diesel that has caused an economic crisis.

The Cabinet decision came as Kanchana Wijesekera headed to Qatar and a colleague was due to arrive in Russia on Sunday for talks on energy deals with officials there.

Sri Lanka is experiencing a worst economic crisis since its independence with foreign exchange reserves at a record low of $1.92 billion, according to the Central Bank, but analysts believe there is a lower level of useable funds.

The island of 22 million people is struggling to pay for essential imports of food, medicine and fuel.

The government shut down urban schools for about two weeks and allowed fuel supplies to services deemed essential like health, trains and buses, as stocks would only last a week or so based on regular demand.

On Twitter, Wijesekera said that Cabinet approval was granted to open up the fuel import and retail sales market to companies from oil-producing nations.

ALSO READ: IMF delegation arrives in crisis-hit Sri Lanka as fuel runs out.

They will have the ability to import fuel and operate without any forex requirements from the CBSL central bank and banks for the first few months of operations. The state-owned Ceylon Petroleum Corporation controls 80% of the fuel market and Lanka IOC, a unit of Indian Oil Corporation, the rest.

The Cabinet allowed bunkering companies already registered with the government to import jet fuel.

Sri Lanka needs about 1.2 million liters of so-called A 1 jet fuel a day to supply airlines, but the CPC has not been able to meet the requirement, the government said in a statement.

The Cabinet made a decision to make certain flights are not disrupted due to the fuel shortage.

Wijesekera flew to Qatar late on Monday night while Education Minister Susil Premajayanth is due to arrive in Russia on July 3.

A ministry official who declined to be identified as he is not authorized to speak to media, Wijesekera hopes to find a long-term fuel supplier in Qatar who is willing to work with Sri Lanka's foreign exchange and other challenges.

Wijesekera told reporters on Sunday that Sri Lanka had been in talks with various countries, including Russia, about buying fuel.

On Tuesday, traffic was light on the streets of the main city of Colombo, with city schools shut and most public and private sector employees working from home.

Buses and trains were running and shops were open for groceries and other essentials.

READ MORE: Sri Lankans to default on debt, no money for fuel, minister says.