Spot purchases of refined petroleum products in the Singapore market due to the US-imposed Iranian oil embargo have cost the Government US$ 5.7 million or Rs. 735 million. The excess cost in respect of petrol was US$ 3.1 million (Rs. 400 million) whilst it was US$ 2.6 million (Rs. 335 million) for diesel. As a result [...]

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Lanka pays Rs. 735 million more for fuel

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Spot purchases of refined petroleum products in the Singapore market due to the US-imposed Iranian oil embargo have cost the Government US$ 5.7 million or Rs. 735 million. The excess cost in respect of petrol was US$ 3.1 million (Rs. 400 million) whilst it was US$ 2.6 million (Rs. 335 million) for diesel. As a result of these spot purchases higher premium rates had to be paid, the Cabinet was told early this month.

The ministers have noted that it was important to enter into long-term agreements with prospective suppliers. They are of the view that such a step would minimise the adverse effects caused by price fluctuations of petrol and related products in the world market. The Government was prompted to go into a long-term deal with a Singapore firm to import refined petroleum products till June this year after the US government expressed concerns over Iranian oil procurements by Sri Lanka through third parties in breach of the sanctions imposed by Washington.

The concerns were conveyed to President Mahinda Rajapaksa by US Ambassador Michele Sison. In December, the US rejected Sri Lanka’s plea for exemption from the oil embargo on Iran and were told to dissociate itself from 30 companies which were involved in transactions with Iran.

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