- Import-dependent nation hit hard by global energy shock
- Interested in Russian crude to supply sole refinery
- Payment curbs, price differences still under discussion, minister says
COLOMBO, May 25 (Reuters) - Sri Lanka is in talks to buy Russian crude and refined fuels from Russia and China, the energy minister said on Monday, as the import-dependent nation seeks to alleviate shortages linked to the global energy crisis.
Sri Lanka, which imports all of its fuel, has been hit hard by energy market fallout from the Iran war, pushing authorities to hike fuel prices by 40%, ration fuel sales, and declare Wednesdays as public holidays.
Energy Minister Anura Karunathilake told Reuters the government had held "positive" discussions with both Russia and China over the past two months.
He added, however, that prices were still being negotiated in the case of potential Chinese fuel supplies, while payment methods needed to be ironed out with Moscow.
"We have not agreed fully on what would be the payment method. In principle, we don't have any problem in paying in any currency, but what would be the practical method? That's the case," he told Reuters, declining to give a timeline for possible imports.
U.S. SANCTIONS WAIVER
Sri Lanka is hoping to utilise a temporary sanctions waiver by the U.S. available until June 17, primarily for crude oil from Russia to run its sole refinery, but it is also open to buying refined products from both countries, Karunathilake said.
Initially, Sri Lanka is hoping to procure one shipment from each country and would then consider the possibility of continuing imports, the minister said.
Most of Sri Lanka's fuel imports come from Singapore and India, with crude oil typically sourced from the United Arab Emirates. Tender-based fuel shipments, mostly from Singapore, are already in place until August, Karunathilake said.
In line with higher fuel prices, power tariffs were also increased by 18% earlier this month as the nation attempts to align with a $2.9 billion programme with the International Monetary Fund that helped it recover from a severe financial crisis four years ago.
The higher fuel bill has placed pressure on the rupee, which has depreciated about 8.7% since early March, reaching 336 rupees on Monday.
Reporting by Uditha Jayasinghe; Editing by Helen Popper
Source: Reuters