Russian oil possible only through long-term contracts outside tender process

The Sri Lankan Government (GoSL) will have to enter into long-term contracts with Russian oil companies outside the tender process to get fuel, said Minister of Power and Energy Kanchana Wijesekera yesterday (9), adding that the Ministry has already written to four Russian oil companies, informing them of the country’s requirement. 

Speaking yesterday in Parliament, the Minister refuted claims that Sri Lanka would be able to obtain Russian oil at a 35% discount, as no such proposal has been presented to the Ministry yet. 

Wijesekera stated that when he met with Russian Ambassador to Sri Lanka Yury Materiy, the latter had given him a list of four Russian oil companies, and told him to write to them with details of Sri Lanka’s requirements. 

He added that two of the four companies had replied to the Ministry, stating that they have received the letters and would provide the required information. 

Further, he said that the Russian Ambassador had informed him that the Russian Government does not conduct government-to-government deals on fuel, and that it does not provide credit facilities to purchase oil. 

“But the Russian Ambassador said that if Russian oil companies agree to provide us fuel, they will agree outside the tender process, and that we will have to enter into long-term contracts with them if the prices are favourable to us,” the Minister said. 

The Minister also said that some suppliers do not respond to the calls for tenders by the GoSL for fuel, as there are long-outstanding dues payable to them, and some have not been able to settle their credit with banks because of these payment delays. 

Moreover, he said, suppliers are only providing fuel on payments made, as Sri Lanka is no longer receiving any credit facilities provided by suppliers. 

“We have received a total of 90 proposals for oil supply, where various parties have said that they could provide oil, but when we analysed those proposals, we could not go ahead with some of them, as they do not agree to the methods by we could pay them,” Wijesekera said.