Sapugaskanda Oil Refinery to be temporarily shut down
December 30, 2021 01:19 pm
The Sapugaskanda Oil Refinery will temporarily remain closed from January 03, 2022, due to the shortage in US dollars for the purchase of crude oil, says Minister of Energy Udaya Gammanpila.
According to a statement issued by the Energy Ministry’s Office, the refinery is expected to resume its operations before January 30, 2022.
The Singapore-based energy and commodities company which was awarded the long-term contract to provide crude oil to Sri Lanka is slated to commence supplying petroleum from January 26, the statement read.
During the procurement process, the relevant company should be informed 90 days in advance in order to purchase Murban Crude Oil used at Sapugaskanda refinery, the ministry explained.
It added that the shortage of foreign exchange has hampered the plan to buy alternative crude oil as an emergency purchase.
Thereby, purchasing crude oil on a credit basis has become difficult as Sri Lanka has fallen in the credit rating, the ministry pointed out.
It, however, went on to assure that Sri Lanka will not suffer a shortage of fuel due to the refinery’s temporary closure, as the facility fulfills only 14% of petrol and 29% of diesel requirements of the country.
The announcement came a month after Sri Lanka temporarily halted the operations at the Sapugaskanda Oil Refinery on November 15 in a bid to save foreign exchange through the suspension of crude oil imports.
