CPC's entire crude from Iran

By Bandula Sirimanna

The Ceylon Petroleum Corporation (CPC) will be importing its entire crude requirements for the next seven months from Iran under a new credit line facility but this is unlikely to impact on prices.

Chairman CPC Asantha de Mel said Iran has extended a 7-month credit facility to import the entire crude oil requirement from there. The annual oil bill is over US$1billion and the Iranian assistance will enable the corporation to purchase crude oil from Iran without paying them immediately.

He said this will help to maintain the price of fuel at the present level but added the CPC will not be able to bring down the prices as the present world market oil price is US$ 95-100 for a barrel. He added that the CPC was negotiating with Iran to obtain this concession during the past eight months but it materialized only after President Mahinda Rajapaksa's visit to that country. He noted that Sri Lanka will also be able to save US$ 1 million a year with the removal of Letters of Credit by the Iranian government.

“Iran is also providing financial assistance amounting to $160 million in the form of a grant to implement the Sapugaskanda oil refinery expansion project and its feasibility study will commence shortly,” he said