PM Wickremesinghe open to getting Russian oil

COLOMBO (AP) :

Sri Lanka may be compelled to buy more oil from Russia as the island nation hunts desperately for fuel amid an unprecedented economic crisis, the newly appointed prime minister said.

Prime Minister Ranil Wickremesinghe said he would first look to other sources, but would be open to buying more crude from Moscow. Western nations largely have cut off energy imports from Russia, in line with sanctions over its war on Ukraine.

In a wide-ranging interview with AP, Wickremesinghe also indicated he would be willing to accept more financial help from China, despite his country’s mounting debt. And, while he acknowledged that Sri Lanka’s current predicament is of “its own making”, he said the war in Ukraine is making it even worse, and that dire food shortages could continue until 2024. He said Russia had also offered wheat to Sri Lanka.

Sri Lanka has amassed $51 billion in foreign debt, but has suspended repayment of nearly $7 billion due this year. The crushing debt has left the country with no money for basic imports, which means citizens are struggling to access basic necessities such as food, fuel, medicine — even toilet paper and matches.

Two weeks ago, the country bought a 90,000-metric ton shipment of Russian crude to restart its only refinery, the energy minister told reporters.

DESPERATELY NEEDS FUEL

Wickremesinghe did not comment directly on those reports, and said he did not know whether more orders were in the pipeline. But he said Sri Lanka desperately needs fuel, and is currently trying to get oil and coal from the country’s traditional suppliers in the Middle East.

“If we can get from any other sources, we will get from there. Otherwise, (we) may have to go to Russia again,” he said.

Officials are negotiating with private suppliers, but Wickremesinghe said one issue they face is that “there is a lot of oil going around which can be sourced back informally to Iran or to Russia”.

“Sometimes we may not know what oil we are buying,” he said. “Certainly, we are looking at the Gulf as our main supply.”

Sri Lanka has received and continues to reach out to numerous countries for help — including the most controversial, China, currently the country’s third-largest creditor. Opposition figures have accused the president and the former prime minister of taking on a slew of Chinese loans for splashy infrastructure projects that have since failed to generate profit, instead adding to the country’s debt.

Critics have also pointed to a beleaguered port in the hometown of then President Mahinda Rajapaksa, Hambantota, built along with a nearby airport as part of China’s Belt and Road Initiative projects, saying they cost too much and do too little for the economy.

Sri Lanka is also seeking financial assistance from the World Food Program, which may send a team to the country soon, and Wickremesinghe is banking on a bailout package from the International Monetary Fund. But, even if approved, he doesn’t expect to see money from the package until October onwards.

Wickremesinghe acknowledged that the crisis in Sri Lanka has been of its “own making”. Many have blamed government mismanagement, deep tax cuts in 2019, policy blunders that devastated crops and a sharp plunge in tourism because of the coronavirus pandemic. But he also stressed that the war in Ukraine, which has thrown global supply chains into a tailspin and pushed fuel and food prices to unaffordable levels, has made things much worse.

Wickremesinghe said he felt terrible watching his nation suffer, “both as a citizen and a prime minister”.

He said he hasn’t ever seen anything like this in Sri Lanka — and didn’t think he ever would. “I have generally been in governments where I ensured people had three meals and their income increased,” he said. “We’ve had difficult times. ... But not like this. I have not seen ... people without fuel, without food.”