Sri Lanka’s Sapugaskanda oil refinery will finally receive crude oil stocks to resume its operations now following the commencement of unloading the ESPO crude oil cargo after a new modality was agreed with the supplier, Minister of Power and Energy Kanchana Wijesekara said.
The Sapukaskanda oil refinery is ranked as the most inefficient refinery of Asia for the last 23 years by Global indexes.
The refinery is closed most of the time due to lack of crude oil. whole of this year only 3 ships of crude has been refined and the refinery was closed for more than 8 months .it is reliably learnt that the central bank has refused to give any dollars for crude oil imports upon knowing about inefficiency of the refinery.
The refinery is more than 50 years old. The staff are lethargic and not innovative, Energy Ministry sources claimed adding that these employees resist change and want to do things the easy way from 1969 to 2022 they claimed that the refinery can only use Iranian light crude oil.
This trade union campaign has caused much inconvenience to the then government who could not import oil from Iran due to sanctions.
Later the refinery staff got used to Abu Dhabi’s crude oil and did not try any other crude for the last 20 years.
They want to work less and show some positive numbers by buying the most expensive crude oil because if they try anything else they have to work more and find new methods and solutions, petroleum industry experts claimed.
As the nation is struggling to make ends meet with many people being on the verge of demise due to starvation while over rupees 700 million is spent monthly just to pay the salaries and overheads of the 1100 staff of the Sapukaskanda oil refinery, they added.
The Sapugaskanda refinery was closed since 2021 and resumed operations in March this year and was closed again in July until it was reopened in August. It was also shut down for a week in May this year due to a technical issue.
The shutting down and restarting the refinery will create mechanical faults in its operation which will require the replacement of spares at unbearable costs during the dollar crisis period, a senior engineer of the refinery said.
An oil tanker carrying 99,000 MT of Eastern Siberia Pacific Ocean (ESPO) crude oil remains off the west coast of Sri Lanka for more than a month awaiting payment and the financial matter is now settled officials said.
Several CPC trade unionists and various interested parties are making allegations against the crude oil order placed by the CPC following the proper procedure and once an order had been placed and the vessel had arrived, the Government could not refuse it, Minister Wijesekera said.
Meanwhile, it is reported that the imported fuel cargos are also scheduled to reach the island in the next few days.
Responding to a question, top CPC official pointed out that State enterprises such as the Ceylon Electricity Board (CEB) and the loss-making National Carrier SriLankan Airlines owed the fuel supplier millions of dollars in arrears.
He noted that had the monies owed been paid, the CPC would have been able to provide the banks with the necessary rupee equivalent to the dollar price of shipments, thereby securing Letters of Credit (LCs) to import crude oil, which would allow them to refine fuel locally.
The tanker nowunloading fuel is carrying approximately Rs. 28 billion ($ 80 million) worth of crude oil.
Sri Lankan Airlines has $ 300 million in arrears to the CPC. The power sector, the CEB, and Independent Power Producers (IPPs) owe the CPC approximately Rs. 100 billion.
If these state institutions fulfill their financial obligations then the CPC could settle payment of the lineup crude oil shipments to keep the refinery going for months.
Once a refinery is operational, it should be kept running without disruption to get the best value for money in fuel to meet the part of country’s demand, he added.
