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Saturday April 20th, 2024

Sri Lanka minister promises no power cuts till Jan 18, amid demand for dollarized payments

SPORATIC CUTS: On Tuesday power was cut after CEBs Kelanitissa combined cycle power plant ran out of fuel

ECONOMYNEXT – Sri Lanka’s Power Minister Gamini Lokuge has promised no power cuts till January 18, though the power regulator has given the nod for Ceylon Electricity Board to shed loads if there are capacity problems or fuel shortages.

Energy Minister Udaya Gammnapila had earlier asked for dollarized payments for fuel.

The utility had been running down its hydro storage, which is needed for the height of the dry season after a coal plant mal functioned and there were disruptions in fuel supply amid forex shortages.

Despite the regulators approval, the planned power cuts were vetoed by political authorities, putting the conservation plan out of kilter, industry analysts say. The Ceylon Electricity Board the pulled off a load shedding schedule.

Electricity will be provided with no interruptions till January 18, and there are discussions to get more fuel from state-run Ceylon Petroleum Corporation, Power Minister Gamini Lokuge said.

“We have received 3000 Metric tons of Furnace oil to the Kelanitissa power plant. We can provide electricity without any interruption till 18,” Minister Lokuge said Sunday.

“Tomorrow we hope to have a meeting with the Petroleum corporation to see whether we could get enough furnace oil till January 22.”

Lokuge said, it can be done because the CEB has informed about the furnace oil need for power generation, beforehand.

He said diesel ship was also in port and cargo could be unloaded after payments are made.

Sri Lanka is seeing booming imports and forex shortages after money printed to keep interest rates down and finance a deficit. At the moment money is mostly being printed to sterilize interventions (after giving reserves for imports).

Minister of Energy, Udaya Gammanpila had said, the CEB had not asked for furnace oil or diesel for power generation until the end of January and the next supply will start only from January 23 onwards.

However a breakdown of a 300 MegaWatt coal power station had increase the demand for furnace oil and diesel.

Minister Gammanpila had said the CEB will have to pay the Ceylon Electricity Board in US dollars for electricity.

Gammanpila said, the CEB requested an emergency need of diesel with the breakdown in Norochcholai power plant therefore, diesel till Monday will be provided to the CEB by the Petroleum Corporation.

“We have informed all those parties saying that we are unable to find dollar to import the fuel needed by them at a time where we struggling to import the fuel for general consumption,” Minister Gammanpila said in an interview with Sri Lanka’s Swarnavahini Television earlier this month.

“Therefore, if you find us some dollars, then we will be able to bring in the fuel needed for airplanes and furnace oil for electricity power plants.”

“Even CEYPETCO does not earn dollars, but somehow we are supplying for the demand we have. And I hope others will do the same.”

The CEB has a large number of export customers but they are not allowed to pay the utility in US dollars. Colombo/ Jan 16/2021)

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Sri Lanka discussing giving extra land, water for Chinese oil refinery

ECONOMYNEXT – Sri Lanka is in discussions with China’s Sinopec to give extra land and assure water supplies after the company decided to expand the capacity of a planned oil refinery in Hambantota, Energy Minister Kanchana Wijesekera said.

“There are concerns on how the water supply is going to be provided for the refinery,” Minister Wijesekera told reporters Friday.

The refinery will need more land and also revise conditions in a Board of Investment agreement, he said.

Read more
Sinopec to double capacity of new refinery in Sri Lanka’s Hambantota

Recommendations and decisions from Sri Lanka’s side had already been sent and Sinopec is expected to revert back in May.

“We are hoping to sign the agreement once everyone has agreed,” Wijesekara said.

The principle agreements are expected to be signed by June, he said.

The refinery could sell up to 10 percent of its output in the domestic market.

“There is no commitment by the government to purchase anything,” Minister Wijesekera said. (Colombo/Apr19/2024)

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Sri Lanka rupee closes weaker at 302.00/50 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 302.00/50 to the US dollar in the spot forex market on Friday, down from 301.50/302.00 a day earlier, dealers said.

There was increased demand for dollars after the central bank bought 715 million dollars from forex markets. In the previous two months it was buying on average about 200 million US dollars, leaving market participants and bank in a ‘oversold’ position.

There were some official dollars sales Friday dealers said.

READ Sri Lanka rupee quoted wide to US dollar as peg inconsistencies flare up

Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed at 11.30/40 percent down from 11.35/40 percent.

A bond maturing on 15.09.2027 closed at 11.95/12.05 percent up from 11.90/12.05 percent.

A bond maturing on 15.12.2028 closed stable at 12.15/25 percent.

A bond maturing on 15.09.2029 closed stable at 12.30/40 percent.

A bond maturing on 01.10.2032 closed stable at 12.40/50 percent. (Colombo/Apr19/2024)

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Sri Lanka stocks close down, banks trade down

ECONOMYNEXT – The Colombo Stock Exchange closed down on Friday, data on its site showed.

The broader All Share Index closed down 0.38 percent, or 44.80 points, at 11,753; while the S&P SL20 Index closed down 0.53 percent, or 18.46 points, at 3,456.

Turnover was at 1.4 billion. The diversified financials (Rs366mn) and banks (Rs266mn) sectors continued to see selling pressure.

“This was possibly due to uncertainty around the bond discussions,” market participants said.

With the exception of Sampath Bank Plc (up at 77.50) all other banks traded down in the day. Commercial Bank of Ceylon Plc was down at 104.50, Hatton National Bank Plc was down at 188.50, and DFCC Bank Plc was down at 77.00.

LOLC Finance Plc saw the most trades and closed up at 6.40. Another LOLC company, Browns Investments Plc, also saw high traded volumes and closed up at 5.60.

Softlogic Capital Plc was up at 7.00, and Softlogic Holdings Plc was up at 11.20. A trading suspension imposed on SHL.N0000 was lifted effective today as the company submitted the annual report for the year ended 31st March 2023.

However, shares of the Company will remain in the Watch List “due to Qualified Audit Opinion and Emphasis of matter on going concern in the Independent Auditor’s Report in the Audited Financial Statements for the year ended 31st March 2022.”

Dialog Axiata Plc, which announced its merger with Bharti Airtel Thursday, saw its share price close up at 11.90.

“There was some traction on index heavyweights,” market participants pointed out.

Top contributors to the APSI included Aitken Spence Plc (up at 134.50), Ceylon Tobacco Company Plc (up at 1,245.25, and Lion Brewery (Ceylon) Plc (up at 1,048.50).

There was a net foreign inflow of 5 million. (Colombo/Apr19/2024)

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