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Friday June 14th, 2024

Sri Lanka petrol, diesel, stocks down to six days in forex crisis

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation used to maintain two to three weeks of stocks before a currency crisis intensified, but it has now fallen to 5 to 6 days leading to stock outs at filling stations an official said.

“Though there were speculation of fuel shortages for about six months, with the help of central bank and Bank of Ceylon and People’s Bank it we have come this far,” Secretary to the Ministry of Energy K D Olga, told the Sri Lanka’s Hiru Television.

“But now it has come to a decisive point.”

The daily demand for diesel for transport, factories and a Sojitz diesel power plant was about 6,000 metric tonnes a day.

However it has now shot up to about 9,000 Metric tonnes a day, with heightened demand from the power sector, Olga said. The CEB is trying to conserve water in hydro storage in the drought season running up to May.

After cancelling coal plants Sri Lanka has has run into power cuts in the past.

The West Coast Power plant (which is used to run on fuel oil) alone needs 1,000 metric tonnes a day, she said.

“The increased use of generators has also driven up demand,” she said. Many private customers are using generators during power cuts, imposed to reduce generation on the grids and save water during the night peak.

CPC is now running with low levels of stocks with foreign exchange shortages delaying the unloading of ships.

Olga said procurement was being done based on projections and the ships were arriving on time.

Sri Lanka is experiencing severe forex shortages due to money being printed to maintain low rates. Now money is mostly printing money after giving reserves (sterilized interventions) to keep the policy rate at 6.5 percent, driving up cascading credit.

“About six months ago we had stocks for 15 to 21 days,” she said. “When the Norochcholai coal plant broke down we found it difficult to maintain stocks.”

“Now we have stocks for about 5 to 6 days.”

The CEB is using diesel to generate power with hydro having been depleted during the previous months due to no permission being given for daily power cuts.

On Saturday, a petrol tanker with 37,500 MT had arrived in Colombo. However its unloading was delayed with foreign exchange shortages.

Olga said on February 21 night that the ship was being unloaded.

On February 22, foreign exchange for the diesel ship was expected, she said.

Daily petrol demand had risen to around 3,800 to 4,000 MT from around 3,200 to 3,500 earlier, she said. Higher petrol demand was partly due to people using more private vehicles to avoid Covid.

Over the past week, there petrol sheds from various locations ran out of petrol or diesel. On Monday many sheds ran out of diesel, but most had petrol.

Due to the need to keep at least 3 days of stocks, CPC was limiting issues, Olga said.

“The CPC is forced to limit the issue of petrol to conserve stock,” she said. “But this is not to keep stock and make profits after a price hike.”

The CPC had earlier bought oil on credit, when the central bank printed money and created forex shortages, but now all shipments have to be paid before they are unloaded.

Earlier stocks were bought on credit up to one year, she said. (Colombo/Feb22/2022)

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  1. NB says:

    The government should just bite the bullet and increase the price of petrol. Reduce consumption that way, and the earnings from that subsidize diesel so that we don’t add to the inflation.

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  1. NB says:

    The government should just bite the bullet and increase the price of petrol. Reduce consumption that way, and the earnings from that subsidize diesel so that we don’t add to the inflation.

Sri Lanka opposition leader proposes Grama Rajya system in addition to 13A

Opposition leader Sajith Premadasa (r) – File photo

ECONOMYNEXT — Sri Lanka opposition leader Sajith Premadasa has proposed devolving power to the village level through a Grama Rajya system in addition to implementing the 13th amendment to the constitution.

Speaking at an event in Jaffna on on Wednesday June 12, Premadasa said all provinces will benefit from the 13th amendment.

“Whatever one’s ethnicity, religion, status or region, this country has citizens of equal level. They’re all Sri Lankan citizens.

“There is no division or grouping.  As we give you and every other province what you should be given through the 13th amendment, we must implement a Grama Rajya system,” Premadasa said, addressing a crowd of school children and other attendees.

Premadasa’s assurance of implementing the 13th amendment has already drawn some protest in the south.

A collective of civil society organisations held a protest outside the office of the leader of the opposition in Colombo on Thursday June 12.

Calling itself the ‘Coalition Against Partition of Sri Lanka’, the group carrying national flags marched up to the opposition leader’s office Thursday June 13 morning and demonstrated against the full implementation of the 13th amendment.

“We arrived here today to hand over a missive against devolving police powers, land powers and judicial powers. If Mr Premadasa is inside, come outside,” Jamuni Kamantha Thushara, Chairman of the Citizen’s Movement Against Fraud, Corruption, and Waste, was seen declaring at the site.

“First of all, tell us what we stand to achieve by dividing and giving away the north and east,” said another protestor, warning against bringing the 13th amendment “anywhere here (paththa palaathe)”.

A police officer at the scene the protestors that a secretary to the opposition leader was ready to accept their letter.

“In Kilonochchi, he says the 13th amendment will be implemented. The votes in the north are going to be decisive this election. To win those votes, President Ranil Wickremesinghe, Sajith and Anura Kumara Dissanayake all say they will implement the 13th. We will not allow this country to be divided into nine pieces,” said Thushara.

Ven Balangoda Kassapa Thero, who was arrested on June 06 during a protest against the new Electricity Act, was also seen at Thursday’s protest. The Buddhist monk requested for a debate with Premadasa on the matter of the 13th amendment. (Colombo/Jun12/2024)

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Sri Lanka rupee closes flat at 303.85/95 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed broadly flat at 303.85/95 to the US dollar on Thursday, from 303.80/304.00 to the dollar the previous day, dealers said. Bond yields were down.

A bond maturing on 15.12.2026 closed at 10.00/30 percent, down from 10.20/40 percent.

A bond maturing on 15.10.2027 closed at 10.60/75 percent.

A bond maturing on 01.07.2028 closed at 11.00/15 percent, down from 11.15/40 percent.

A bond maturing on 15.09.2029 closed at 11.80/85 percent.

A bond maturing on 15.05.2030 closed at 11.85/12.05 percent, down from 11.90/12.05 percent.

A bond maturing on 01.10.2032 closed stable at 11.95/12.15 percent. (Colombo/Jun13/2024)

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Sri Lanka sells Rs295bn in 2027 to 2031 bonds

ECONOMYNEXT – Sri Lanka has sold 295 billion rupees in 2027, 2029 and 2031 bonds, data from the state debt office showed.

The debt office sold an offered 60 billion rupees of 15 October 2027 at an average yield of 10.30 percent.

All offered 125 billion rupees of 15 September 2029 bonds were sold at 11.00 percent.

All 110 billion rupees offered of 01 December 2031 bonds were sold at 12.00 percent. (Colombo/May13/2024)

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