Huge fuel bill mars President's Iran visit

Foreign Ministry tells CPC to act fast in making payment of Rs. 37 billion

Ahead of a proposed visit to Iran by President Maithripala Sirisena, the Ceylon Petroleum Corporation ( CPC) has been told to pay a fuel import bill of more than Rs. 37 billion it owes to that country.

CPC officials were called to the Foreign Ministry on Thursday and were told to pay the long overdue bill as Iranian officials were due in Sri Lanka soon to discuss plans for the President’s visit. They are also expected to discuss modalities of payments.

The fuel bills had been pending for more than five years as payments could not be made due to US sanctions against transactions with the Iranian government.

During President Sirisena's visit, scheduled for late next month, the two sides are expected to discuss, among several other matters the issue of fuel purchases.

The Iranian government earlier reminded Petroluem Resources Minister Chandima Weerakkody, during his visit to Iran about the arrears, but the payment was not made.

A CPC official said the call to pay the arrears would force the corporation to obtain a loan.

The moves came after the Treasury obtained Rs. 13 billion from the CPC early this month, despite appeals by the CPC that the money was required for urgent repairs of the Sapugaskanda oil refinery.

The Sunday Times learns that the CPC had pointed out to the Treasury that the failure to carry out the repairs could have a bearing on the refinery and thereby affect fuel supplies.

Sri Lanka’s thermal power production is expected to rise in March next year in view of the impending drought conditions. Already officials have been advised to prepare for an impending drought.