Held Up Crude Shipment Becoming A Bigger Financial Headache To Cash Strapped Govt As Demurrage Charges Too Pile Up

Shakila Ifham

October 10, 2022


The release of 99,000 metric tonnes of crude oil held up from unloading for nearly three weeks due to failure of authorities to find required dollars, will be further delayed, a Power and Energy Ministry official said.

“We requested the Central Bank to release monies in this regard, however, the Bank has not given a definite date as yet,” sources close to Power and Energy Minister Kanchana Wijesekera said.

The vessel with 99,000 metric tonnes of crude oil has been anchored in the sea near the Colombo Port for more than 20 days due to the nonpayment of USD 7 million dollars or more than Rs. 2500 million.

It is understood that the ship has to be paid 150,000 dollars per day as demurrage.

The ship containing Ural crude oil ordered from Coral Energy Company arrived in Sri Lanka on September 20 and that discussions are ongoing with the Ministry of Finance and the Treasury to release it.

There are accusations that Ural crude oil with a foul smell is of substandard quality and the further import of such crude oil has been objected to by various parties in the energy sector.

Some of the byproducts refined from the Ural crude too has become a headache for CPC because of their substandard quality.

The Cabinet has awarded a long term contract of importing diesel to United Arab Emirates-based Coral Energy DMCC Company for eight months through October this year, a government document said.

A special procurement standing committee has also recommended to award the contract for Coral Energy DMCC to import of diesel (maximum Sulphur percentage of 0.05) for a period of eight (08) months from March 1 to October 31 this year, an official said

The government, however, did not reveal the terms and conditions of the contract with the UAE-based company.