A foreign exchange shortage has resulted in the worst financial crisis Sri Lanka has ever endured, with shortages of everything from food to crude. Fuel supplies are down to just days, food has run out at supermarkets, and social-economic chaos has unfolded across the island country in South Asia.
However, there's short-term hope, and somehow the bankrupt country found enough money to pay for a shipment of Russian crude.
Bloomberg said Ceylon Petroleum Corp., the country's only refinery, is set to take shipment of Russian grade Siberian Light on May 28. It will be the first time the refinery has processed crude to produce high-value products such as gasoline and diesel in two months.
Fuel supplies on the island nation are so low that the government has told citizens to stop waiting in long lines at filling stations. The government has run out of foreign reserves to pay for essential imports.
Last week, newly-appointed prime minister, Ranil Wickremesinghe, said his government needed $75 million for critical imports such as crude.
"At the moment, we only have petrol stocks for a single day. The next couple of months will be the most difficult ones of our lives.
"We must prepare ourselves to make some sacrifices and face the challenges of this period," Wickremesinghe said.
Sapugaskanda Refinery will commence operations for first time since March 20th with a Crude Oil cargo unloading tomo. The refinery will start producing Fuel Oil in 6 days. Stocks on 26 May -— Kanchana Wijesekera (@kanchana_wij) May 26, 2022
Diesel 23022 MT, Sup Diesel 2588 MT, 92 Pet 39968 MT, 95 Pet 7112 MT and JETA1 3578 MT
Ship-tracking data compiled by Bloomberg shows the Nissos Delos tanker carrying Siberian Light has moved towards a mooring point where it can begin discharge operations. The vessel loaded up on March 29 at Novorossiysk, a port city on the Black Sea in southern Russia.
Bloomberg wasn't exactly sure how Sri Lanka paid for the Russian crude, considering it owes more than $50bn in overseas debt. It's seeking a $4bn loan from the IMF and has asked China to renegotiate at least $3.5bn in debt.
China recently offered a few hundred million dollars in lending to help alleviate a shortage of essential goods.
"It's quite substantial. It would be a few hundred million dollars," Ranil Wickremesinghe, who was appointed Sri Lanka's prime minister this month, told the Financial Times in an interview.
"It'll still help us get hold of essential consumer items, fertilizers. . . the ministry of finance is having discussions on some of the items."
Perhaps, that's how Sri Lanka will pay for the Russian crude.