Columns

By Sandun Jayawardana 

The war raging in West Asia and its adverse impact on Sri Lanka was uppermost in the minds of lawmakers as the conflict entered its third week. The war also messed up the House’s agenda for the week, as the government’s decision to declare Wednesday a holiday for the public sector to conserve fuel forced the Committee on Parliamentary Business to cancel Parliament sittings that had earlier been scheduled for Wednesday (18). Highlighting the extent of the challenges the war posed to Sri Lanka, President Anura Kumara Dissanayake himself addressed the House on Friday (20), providing a lengthy update on the current situation and the steps his government had taken and intended to take in future to minimise the impact. 

The President first highlighted the steps his government had taken during the conflict to preserve Sri Lanka’s longstanding policy of neutrality, while also ensuring that it upheld its commitment to international obligations and humanitarian principles.

Turning to the economic impact, Sri Lanka has two key economic sources centred on West Asia, President Dissanayake explained. “The first is the supply of gas and fuel, which is of critical importance to our economy. The second is our overseas Sri Lankan workforce. Nearly one million Sri Lankans are employed in that region and they contribute a significant share to our national economy. Therefore, this is not an internal crisis. It is an external shock and we must carefully assess how it may impact us and respond accordingly.”

The government has identified the nature of this external shock in two key areas, foreign exchange and energy supply chains, he further remarked. In terms of energy purchases, the National People’s Power (NPP) government has consistently sought to secure energy supplies through long-term tenders. At the same time, the government has been engaging in discussions with various countries to explore the possibility of entering into government-to-government agreements. Currently, refined fuel is supplied to Sri Lanka through companies based in Singapore and India. As such, there has not yet been any disruption in relation to long-term tenders for refined petroleum products, the President stated.

However, crude oil remains the primary concern. A shipment of 90,000 metric tonnes was scheduled to arrive on the 24th and 25th of March under a long-term tender, but the supplier has postponed the vessel’s arrival by one day due to the prevailing situation. In addition, another tender for 90,000 metric tonnes has not been fulfilled as expected. The non-arrival of these two crude oil shipments represents the key points at which challenges could emerge, President Dissanayake observed.

With this in mind, the government called for tenders for diesel, petrol, furnace oil, aviation fuel and two crude oil shipments. These tenders were opened on the 17th. As a result, a tender for diesel was awarded, with the shipment expected to arrive on the 6th and 7th of April. A petrol tender was also awarded, scheduled to arrive on the 16th and 17th of April. A furnace oil tender was awarded, and the shipment expected on the 12th and 13th of April. An aviation fuel tender too was awarded, with delivery expected on the 10th and 11th of April. Regarding crude oil, one tender was scheduled for April and the second for June. No company submitted a proposal to supply crude oil in April. However, one company indicated that it could supply a crude oil shipment in June. Accordingly, that tender has been awarded, it was revealed.

Steps are also being taken to ensure the uninterrupted supply of gas, he stressed. “Our priority is not who imports the gas, but ensuring that there is no shortage within the country. We believe that we have taken all possible measures to maintain continuity in the energy supply chain. If the war continues for longer, further challenges may arise. However, we have planned ahead for the foreseeable future.”

The fuel crisis has affected all sectors, Mr. Dissanayake pointed out. A committee has been established to gather information and take the necessary measures regarding potential issues in the fisheries and agriculture sectors. “We will take the required decisions, but it is not possible to do everything at once; it will take a few days.”

The government has also instructed ministries to reduce energy consumption by at least 25%, it was noted.

If the government was really so neutral in this conflict, why did the President not use his Parliamentary speech to condemn this war of aggression, launched in violation of international law and the UN Charter, queried Opposition Leader Sajith Premadasa. The President has an ethical obligation towards safeguarding international law, the opposition leader stressed. “We reiterate that this war has been launched in violation of international law, and as a neutral country, we should not be afraid to condemn such an action,” argued Mr. Premadasa.

More than 1/3 of the country’s population is classified as being poor and this situation will only worsen due to this global conflict situation. These issues need answers, the opposition leader insisted. He also called on the government to immediately suspend the execution of Parate Law governing Micro, Small and Medium Enterprises.

The NPP played a part while in opposition in provoking people staying in fuel queues to protest and creating general unrest in the country during the period of the economic crisis, but the present opposition would never do such a thing, claimed Samagi Jana Balawegaya (SJB) Kurunegala District MP Dayasiri Jayasekara. If the present situation arose while the NPP was in the opposition, they would have set fire to the entire country, he further claimed. “Even today, we met with the President and requested him to resolve the issues facing the country,” he said, adding that this was a far cry from how the NPP behaved earlier.

Mr. Jayasekara added the government should also take steps to turn the situation into opportunities that benefit Sri Lanka, for example, by coming up with a plan to attract tourists and investors who are currently trying to flee places such as Dubai. A programme should also be put in place to turn Sri Lanka into a logistics hub for shipping by further developing the country’s port system, he further said.

New Democratic Front (NDF) National List MP Ravi Karunanayake argued that opening up the fuel sector would prevent the creation of a black market for fuel and help reduce fuel prices. He reminded that it was the previous government of President Ranil Wickremesinghe that allowed other players such as Sinopec, R.M. Parks and Shell to come into a market that had previously only included the CPC and LIOC. The government need not be carrying the fuel burden by itself when there are several companies catering to the demand and supply of fuel. Since there is competition among several companies, there won’t be an opportunity for anyone to create a black market. It is the consumer who stands to benefit the most in this situation, Mr. Karunanayake opined. The MP said he believes that fuel prices are high today actually because the administrative costs of the CPC is high. “I believe that if we open this up, prices will actually come down,” he said.

Minister of Industry and Entrepreneurship Development Sunil Handunnetti paid tribute to public sector workers who are working tirelessly and without complaint despite transport and fuel quota issues of their own. “None of my Ministry officials demanded a fuel quota of their own. We are working using the same fuel quota given to the public. We have only called in officials to work based on service requirements. We are managing as best we can,” he stressed. The situation is the same in other areas of the public sector, with officials working day and night despite many difficulties, Mr. Handunnetti said. He added that as they had done during Cyclone Ditwah, public sector employees had again set an excellent example for the rest of the country.

Parliament will reconvene at 9.30am on April 7.