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Saturday December 3rd, 2022

Sri Lanka makes contact with nominated Russia oil firms: Minister

ECONOMYNEXT – Sri Lanka has made contact with several companies suggested by Russia’s embassy in Colombo to buy crude, Energy Minister Kanchana Wijesekera said as attempts were being made to get oil on credit to keep the country’s sold refinery running.

“I have the replies from the Russian companies which were suggested by the Russian Ambassador,” Minister Wijesekera told reporters.

“The ambassador for Russia in the country asked me to send the replies of the company, and he will also intervene in the process.

“Also we have sent the message to the Sri Lankan Ambassador in Russia, Janitha Liyanage.”

However, the process is taking time.

Sri Lanka has already bought one shipment of Siberian crude from the international market Dubai-based Coral Energy, officials have said. However Russian state companies are reportedly giving crude at lower prices to countries that can pay.

Due to monetary instability triggered by central bank money printing, Sri Lanka has forex shortages making it difficult to find dollars at fixed prices for large import bills.

Sri Lanka is trying to get crude on credit as it had done during previous currency crises when the central bank printed money and triggered forex shortages.

Sri Lanka’s oil bill has risen to 550 million US dollars a month by June 2022 and the energy ministry has been talking to the central bank to get dollars. The central bank has run out of reserves after two years of money printing but the agency is yet to shift to a free float which will balance outflows to inflows.

Sri Lanka now owes oil firms 730 million US dollars for oil imported on credit, and they are unwilling to supply fuel without upfront payments or deposits, Minister Wijesekera said.

“For crude oil also we have contacted several countries,” Wijeskera said. “We had discussions with embassies in the country as well.

“Even though we have requested firms, due to the financial situation and the ratings of the banks in the country most companies do not agree to get into loan schemes to get oil.

Sri Lanka’s sole refinery is now running with the last Siberian crude shipment.

With the Sapugaskanda refinery being reopened, the available crude stock is being used in the minimum amount to continue the operations of the refinery.

The subcommittee also permitted to import another four ships of crude oil, Wijesekara said

“We can use them in the refinery to increase the current capacity. Until then we are keeping the production at a minimum level,”

According to Wijesekara, currently, around 350 Metric tonnes of Petrol and 600 Metric tonnes of Diesel are being produced by the refinery along with furnace oil and LP gas.

“A ship needs around 80 million US dollars. We have got one Company through the tender process for 3 ships,” Wijesekara said.

“We have given the permission for another three companies to import crude oil and only one has agreed to get us two ships on June 28 and 29.” (Colombo/June 17/2022)

Comments (2)

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  1. Christopher Rabbit says:

    Either SL is begging for oil on credit, or giving too much attention to the US dollar to try to pay for it. How hard is it to pay for this Russian oil in rubles? Won’t it be more affordable than a massive 365+ rate that is already being paid? Nobody is going to want to give a country that is so mired in debt, stuff on credit! STOP FOCUSING ON DEAD-END IDEAS THAT WILL NEVER WORK!

  2. Kadija says:

    Central bank..printing money for two years
    Wow, it’s like illegal money mongers who print fake money, a country’s backbone is the central bank, to nurture a healthy economic structure. Who is the retard who suggested & implemented the printing of money for two long years? it beats me.. these are uneducated donkeys who were given high commands, just like the Srilanka parliament now known as the lunatics’ asylum

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Your email address will not be published. Required fields are marked *

  1. Christopher Rabbit says:

    Either SL is begging for oil on credit, or giving too much attention to the US dollar to try to pay for it. How hard is it to pay for this Russian oil in rubles? Won’t it be more affordable than a massive 365+ rate that is already being paid? Nobody is going to want to give a country that is so mired in debt, stuff on credit! STOP FOCUSING ON DEAD-END IDEAS THAT WILL NEVER WORK!

  2. Kadija says:

    Central bank..printing money for two years
    Wow, it’s like illegal money mongers who print fake money, a country’s backbone is the central bank, to nurture a healthy economic structure. Who is the retard who suggested & implemented the printing of money for two long years? it beats me.. these are uneducated donkeys who were given high commands, just like the Srilanka parliament now known as the lunatics’ asylum

Sri Lanka teachers struggle to abide by saree ‘law’

ECONOMYNEXT – Sri Lanka’s school teachers are struggling to continue the service with the ongoing high inflation destroying their salaries and with on ongoing battle to wear more affordable clothing than the traditional saree while.

With the country is going through its worst currency crisis in the history of its central bank, teachers say the rapid inflation in the country has forced them to go with more affordable clothing than the traditional attire of saree.

Price Shock

“Wearing sarees are a big cost, you need to iron and we have electricity tariffs, textile industry is collapsing and in turn prices are increasing” AM Chandani, an Advanced Level teacher for Mathematics told EconomyNext.

The traditional saree, is considered as the appropriate attire for all female teachers in the country, even though it has not been officially declared under any law. Students wear frocks.

Teachers says while sarees do bring a level of respect and formality, they don’t determine productivity and the quality to education.

“Quality of education is measured through the syllabus and depends on the skills of the educator, but not on what the teacher is wearing, why is education determined by a saree?” Chandani says.

“Saree prices have risen by nearly 50 percent, electricity prices had risen by 75 percent, transportation costs are also increasing and on top of that food inflation is also present in Sri Lanka. How do you expect one to save in a condition like this?”

Pontificating Ministers

At least two ministers wearing Western jacket and tie have pontificated on teachers’ dress.

“The minister for education and other ministers are busy making proclamations on what teachers should wear to school,” Sujata Gamage & Tara de Mel Co-coordinators, Education Forum Sri Lanka said in a statement.

“There is no indication that they have consulted the main stakeholders in this case, the teachers.

There is already a guideline on attire for teachers in Section 5.1.b of Circular 2012/3 on “Code of Ethics and General Rules on the Ethical Conduct of Teachers”. Specifically, teachers are required to:

“Dress in culturally appropriate, clean, smart, and well-tailored clothing, maintaining decency and modesty, at all times.”

“Insisting that the saree is the only appropriate attire, especially at this time when the teachers are struggling to provide for their families, get to work on time, and teach kids who are very likely to come undernourished or hungry, would be inconsiderate.”

“In addition, it would be a violation of their fundamental rights and a violation of the Constitution where the transfer and disciplinary control of all educational personnel is vested with the provinces.”

Sri Lankan teachers’ salaries were increase in January 2022, after the teachers went on a continuous protest, where an allowance of 5,000 rupees was approved by the Cabinet.

Cost of Working

The electricity tariff was increased last August in order to mitigate the continuous losses made by the state-run Ceylon Electricity Board after the rupee collapse from 200 to 360 to the US dollar after macro-economists printed money to target an output gap.

Fuel, taxi and bus fares and food prices also went up with economists printing money.

Sr Lanka’s Ceylon Teachers Union (Check the exact name) said, on average, teachers get paid from 50,000 to 80,000 a month and, the union plans to go into discussions about the education system, rising cost of education as well as the salary offered to teachers.

“Teacher’s salaries are disappearing because the cost of living has risen… and the cost of working is also increasing such as buying of sarees and transport, this will cause an explosion in the education sector” Joseph Stalin, the teachers Union secretary told EconomyNext.

Meanwhile, Minister of Education Susil Premajayantha told parliament on December 01, that relief would be aided to teachers that are unable to afford sarees after media reports showed that teachers found it financially difficult. 

“Even if the government doesn’t approve allocations, I will make sure that aid is being provided to teachers finding it difficult to afford school attire,” Premajayantha said. (Colombo/Dec02/2022)

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Sri Lanka shares ends five week high on easing rate expectations

ECONOMYNEXT – Sri Lanka shares gained for the sixth session on Friday closing on positive sentiments due to expectations of easing market interest rates and generated the highest turnover in two months, brokers said.

The main All Share Price Index (ASPI) closed 0.61 percent or 65.94 points higher at 8,769.73, the highest index gain since October 27.

The market witnessed a turnover of 4 billion rupees, higher than this year’s daily average turnover of 3 billion rupees. This is the highest turnover generated since September 27.

The market saw a foreign inflow of 1 billion rupees, the highest inflow since September 27. The total net foreign inflow stood at 20.2 billion rupees so far for this year.

“Most of the treasury counters gained today with the speculation for interest rates to ease with the inflation therefore treasury shares gained,” a market analyst said.

Analysts said Lanka IOC gained with the government keeping the fuel prices unchanged while global prices fell.

Former Central Bank Governor Indrajit Coomaraswamy said in a forum on Monday that the government is in discussions with Asian Development Bank (ADB) and World Bank to get loans of 1.9 billion US dollars after a reform program with the International Monetary Fund is approved.

A policy loan now being discussed with the World Bank may bring around 700 million US dollars, Coomaraswamy told a business forum organized by CT CLSA Securities, a Colombo-based brokerage.

The Asian Development Bank may also give around 1.2 billion US dollars most of which will be budget support, he said.

In the last few sessions market gained after the Central bank governor said market rates should eventually ease despite the fears of a domestic debt restructuring as inflation falls, increased liquidity in dollar markets, and the inter-bank liquidity improves.

In the past sessions, the index continued to fall on the speculation of a local debt restructuring although no proper decision has been taken so far.

The more liquid index S&P SL20 closed 1.27 percent or 34.86 points higher at 2,774.60.

So far in December ASPI gained 1.3 percent.

The ASPI gained 0.5 percent in November after losing 13.4 percent in October.

It has lost 28.2 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.

Sampath Bank pushed the index up to close at 10.8 percent to 39.9 rupees.

Other top gainers were Lanka IOC gained 6.2 percent to close at 206.8 rupees and Commercial Bank gained 1.8 percent to close at 51 rupees. (Colombo/Dec02/2022)

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Sri Lanka State Tourism Minister backs night life with with 24*7 operation of wine stores

ECONOMYNEXT – Sri Lanka’s State Tourism Minister Diana Gamage wants the island nation’s wine stores to opened all the time if the country wants to boost tourism.

Gamage has been vocal on opening up night time life to attract more tourists and boost foreign exchange revenue for the country to move out of the crisis.

“When tourists come, if all they have to do is roam around and go to sleep at 10 pm every night in front of their hotel room TV, then we will not be able to earn dollars from them,” Gamage told the parliament during the Committee Stage debate of Tourism Ministry.

“The issue with our country is, there is no place to go after 10 pm. This is a paradise. I do not know whether anyone knows the meaning of a paradise.”

“We have to keep this place open 24/7. I have spoken it about many time. Liquor is the highest tax earner in the country. In this paradise, we are closing bars after 11pm. Foreigners in hotels can’t get any alcohol if they need. Because all the places are close. We need to keep this country open 24 hours. Like Singapore and other countries. People must have to have entertainment.”

Gamage’s proposals for night life have been frowned at by some religious leaders citing that the move is against Sri Lanka’s rich and ancient culture.

“I talk about the night life, and when I talked about that earlier many criticized it and saw it as a big sin. That is ones who are incapable of understanding it,” she said.

“What we call night life is actually is a night economy. All the countries in the world have developed because of night economy. These countries get 70 percent of their income from the nigh economy. They only get 30 percent during the day time.”

“We have to develop a night economy in this country. That will earn 70 percent of the income. Only that can develop this country.”

“We can do that. And also our museum, that closes at 5 pm. In other museums earn most during night. It must be opened 24/7.  This night economy is essential for a country’s economy. People must have places t spend their money.” (Colombo/Dec02/2022)

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