Sri Lankan minister seeks help from parliamentary panel to import Russian crude

ECONOMYNEXT – Sri Lanka cannot import oil directly from Russia under current procurement rules.

The Russian Embassy in Colombo had proposed names of several Russian companies to the Ceylon Petroleum Corporation.

However, Russian companies, which were technically private, did not participate in tenders or submit unsolicited proposals for single shipments, but opted for long-term contracts.

“If we need them, we have to contact them directly,” Minister Wijesekera told a forum organized by JAAR Corporate Solutions and the Friedrich Naumann Foundation for Freedom.

“The public procurement system does not allow long-term contracts.”

The CPC was required to launch calls for tenders and to accept unsolicited proposals only in the event of failure of the call for tenders.
Wijesekera suggested that Harsha de Silva, chair of the public finance committee, take up the issue.

“Our committee is alive. It’s not a post-mortem committee like COPC or COPA,” de Silva said.

“The public finance committee will look into this.”

Sri Lanka is currently in the midst of the worst currency crises in the history of the island’s middle regime central bank, which also triggered a default on external debt after two years of money printing and shortages. currencies.

Currency shortages and currency crashes are a problem associated with managed floats of flexible exchange rates that are neither hard pegs nor floating rates.

Attempts to persuade Russia to use a previously agreed US$300 million line of credit had also failed, as the country was prohibited from extending credit to a defaulting nation.

Sri Lanka’s CPC borrows dollars to buy oil and manages unhedged currency exposure whenever the central bank prints money to suppress interest rates and create currency shortages.

These loans accumulated during several monetary crises now exceed three billion US dollars. (Colombo/03/09/2022)

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