Sri Lanka petroleum company run out of cash to buy oil

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COLOMBO: Sri Lanka’s state-run petroleum company has run out of cash to buy oil, and fuel shortages across the country could get worse, the energy minister said Friday.

Udaya Gammanpila said the loss-making Ceylon Petroleum Corporation (CPC) continued to haemorrhage cash and could no longer afford to procure supplies from abroad.

“Earlier, we were short of dollars to import oil. Now we don’t have the rupees to buy the dollars,” Gammanpila told reporters in Colombo.

Diesel is the most commonly used fuel for public transport, and motorists outside the capital have reported long queues at understocked pumps.

Several thermal power stations, meanwhile, closed Friday afternoon after running out of fuel, leading Sri Lanka’s energy utility to announce the resumption of rotating power cuts across the country.

Gammanpila said the CPC suffered losses of up to 42 per cent on the sale of diesel at government-mandated prices, with losses of 83 billion rupees ($415 million) last year alone. “Even if taxes are lifted on oil sales, it is not enough to cover our losses,” he said. “A severe shortage is inevitable unless we increase prices or the treasury offers a bailout.” There was no immediate comment from the finance ministry.

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