Sri Lanka Crisis: Fuel Duopoly To End, Oil-Producing Countries Allowed To Enter Market, Says Energy Minister

Indian Oil's subsidiary in Sri Lanka, Lanka IOC (Indian Oil Corporation) has announced to restrict the sale of petrol to a maximum of Rs 7000 for four-wheelers

In a quest to get more fuel into Sri Lanka, the power and energy minister Kanchana Wijesekera on Tuesday said the duopoly controlling imports would be ended allowing companies from oil-producing countries to enter the market. The development comes amid Wijesekera visit to Qatar and ministerial colleague expected to travel Russia in hunt for energy deals to battle the severe fuel shortage in the island nation that has forced many schools to close, reported news agency Reuters. Wijesekera flew to Qatar late on Monday night while Education Minister Susil Premajayanth is due to arrive in Russia on July 3.

Sri Lankan minister is hoping to track a long-term fuel supplier in Qatar who is "willing to work with Sri Lanka's foreign exchange and other challenges", said a ministry official, according to the report.

President Gotabaya Rajapaksa  said on Twitter that he met the Russian ambassador, Yuri Materiy, on Monday. Sri Lanka last month bought 90,000 tonnes of Russian oil. "Maintaining robust bilateral relations between our two countries, whilst focusing on developing trading opportunities was discussed extensively at this meeting," Rajapaksa said.

Meanwhile, Indian Oil's subsidiary in Sri Lanka, Lanka IOC (Indian Oil Corporation) has announced to restrict the sale of petrol to a maximum of Rs 7000 for four-wheelers.

In a tweet, Lanka IOC PLC shared about the restriction saying, "Lanka IOC with immediate effect restricts sales of Petrol as follows:: 2 Wheelers : Rs.1500/- 3 Wheelers : Rs.2500/- 4 Wheelers : Rs.7000/- Inconvenience caused is deeply regretted."

Lanka IOC is the only private oil company that operates retail petrol and diesel stations in Sri Lanka. The government has also restricted issuing fuel to private vehicles and announced providing fuel only for essential services with effect from Monday night, Daily Mirror reported.

Sri Lanka's Cabinet spokesman Bandula Gunawardena said, "The fuel crisis in the country was discussed at length at the Cabinet meeting held yesterday and it was decided to issue fuel only for essential services. It was decided to provide fuel to essential series, such as ports, health sector, distribution of essential food items, and transportation of agricultural products, until July 10."

He assured that a mechanism to provide a continuous supply of LPG and fuel would be in place after the 10th of July.

Data released on Tuesday underlined the damage the crisis has done to the economy.

Sri Lanka's economy contracted by 1.6% in January to March over the same period in 2021, and analysts said higher inflation and political uncertainty could lead to up to a 5% contraction in the second quarter.