Sri Lanka cenbank borrows mainly from short tenure T-bills to manage high cost – Governor
ECONOMYNEXT — Sri Lanka is pursuing the option of purchasing crude oil from Russia at discounted rates and has had several rounds of talks with Moscow in that regard, Foreign Minister Ali Sabry said.
In an interview with India’s WION television network, Sabry said on Wednesday November 23 that Sri Lanka would “want to work with Russia” without violating international norms or laws.
“We have been disproportionately affected by the Russian conflict, so we pray and urge everybody to quickly and diplomatically and by dialogue resolve this. We have been affected big time in terms of petroleum, crude oil and coal prices, as well as grain prices and escalating prices of fertilizer,” said Sabry.
“These are lifelines for our people. There are 33 percent of Sri Lankans involved in agriculture,” he added.
The minister reiterated that the ongoing conflict between Russia and Ukraine has disportionately impacted Sri Lanka on top of its ongoing currency crisis, the worst in decades.
“With our depreciating rupee, prices have gone up four, five times more. So it has been really difficult for Sri Lankans.
“On top of that, Russia and Ukraine both had been among our top 10 countries in tourism arrivals to Sri Lanka,” he said, noting that the two countries are two important export destinations for Sri Lanka as well.
“Going forward, if there is a way to deal with Russian oil, why not, we want to. These kinds of price escalations are unaffordable to us,” said Sabry.
“As our president put it, when the elephants fight, it’s the grass that gets trampled,” he added.
The minister said Sri Lanka has enjoyed good diplomatic relations with Russia for a long time.
In September, Power & Energy Minister Kanchana Wijesekera said Sri Lanka cannot import oil directly from Russia under current procurement rules. The minister sought the help of a finance committee under opposition legislator Harsha de Silva.
Sri Lanka minister seeks parliament panel help to import Russian crude
Some pro-Russia former government ministers who now sit in the opposition had also urged the government not to overlook “traditional ally” Russia in its efforts to overcome a worsening economic crisis, particularly with regard to ongoing negotiations with the International Monetary Fund (IMF).
“The IMF has never mentioned Russia, Russian oil, or the Ukraine war,” MP Wimal Weerawansa, the leader of this group, said in parliament in June.
Sri Lanka must not overlook Russia in favour of IMF, says MP Weerawansa
In his WION interview on Wednesday, Minister Sabry said discounted pricing will not be a problem to many countries as “no one wants Russian oil to be out of the market”.
“The moment Russian oil goes out of the market, there will be a scarcity, and that will probably shoot up the prices creating economic upheaval in terms of restrictions or something of that sort. I don’t think anyone wants that,” he said.
Asked if Sri Lanka has spoken to India on the matter, the minister said the government has taken it up with Moscow in several rounds of discussions.
“We have had several rounds of discussion with Moscow. Yes, we are pursuing that option. We’re keeping that option open either directly or through India,” he said. (Colombo/Nov24/2022)