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Govt pays hundreds of dollars as demurrage for fuel shipments

The Ceylon Petroleum Corporation (CPC) has to pay approximately US $ 200,000 in demurrage charges for a fuel shipment laying off the Colombo coast awaiting payment to unload the consignment,informed sources revealed.

The Ministry of Energy says at least $ 15,000 had to be paid per day in demurrage charges to the ship that has been waiting since 23 March.

“It has been waiting for some time now, since 23 March. We have to pay demurrage charges as well and it is usually between $ 15,000-$ 18,000 per day for demurrage charges,” a senior official of the ministry said.

However, Sri Lanka is still facing payment challenges for fuel imports with the state-run Ceylon Petroleum Corporation (CPC) owing $235 million for shipments already received, while about $500 million more will be needed to pay for letters of credit maturing over the next six weeks.

“A consignment of 40,000 MT of diesel arrived at the port recently . It will be discharged shortly to fuel sheds as well as 12,000 MT for power generation. It is the second consignment using the Indian credit line,” he said, adding that it had been procured at a cost of $ 38 million.

He said that there were another two ships with crude oil in the open seas but they were at the risk of turning back if payments were not made.

Sri Lanka has extended a credit line with India by $200 million in order to procure emergency fuel stocks, the country’s power and energy minister said on Monday, with four shipments due to arrive in May.

Colombo was also in talks with New Delhi over extending the credit line by an additional $500 million, minister Kanchana Wijesekera told a news conference.

Sri Lanka has used $400 million, on multiple shipments in April, of the $500 million credit line extended by India earlier this year, Wijesekera said. Two fuel shipments will be paid for from the remaining funds in May.

“The Indian credit line was extended by $200 million recently and this will be utilised for four shipments in May. Talks are continuing for a further $500 million with India so in total the credit line will be $1.2 billion,” Wijesekera said.

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