COLOMBO “Sri Lanka may be forced to buy more oil from Russia as the island nation seeks desperate fuel amid an unprecedented economic crisis,” the newly appointed prime minister said.
Prime Minister Ranil Vikremesinghe said he would look for other sources first, but would be willing to buy more oil from Moscow. Western countries have largely cut off energy imports from Russia in line with sanctions over its war against Ukraine.
In an extensive interview with the Associated Press on Saturday, Wickremesinghe also said he would be ready to accept more financial assistance from China, despite his country’s growing debt. While acknowledging that Sri Lanka’s current difficulty is “in itself”, he said the war in Ukraine was making it worse – and that the terrible food shortage could continue until 2024. He said that Russia has also offered wheat to Sri Lanka.
Wikremesinghe, who is also Sri Lanka’s finance minister, addressed the AP in his office in the capital, Colombo, a day after a month after taking over for the sixth time as prime minister. Appointed by President Gotabaya Rajapaksa to resolve an economic crisis that nearly depleted the country’s foreign exchange reserves, Wikremesinghe was sworn in after days of violent protests last month forced his predecessor, Rajapaksa’s brother Mahinda Rajapaksa, to step down and seek refuge. crowds at a naval base.
Sri Lanka has accumulated $ 51 billion in foreign debt, but has stopped paying off nearly $ 7 billion due this year. Devastating debt has left the country without money for basic imports, which means that citizens are struggling to access basic necessities such as food, fuel, medicine – even toilet paper and matches. The shortage led to uninterrupted power outages and people were forced to wait days to prepare gas and petrol in queues that stretched for miles (miles).
Two weeks ago, the country bought 90,000 metric tons (99,000 tons) of Russian crude oil to restart its only refinery, the energy minister told reporters.
Wickremesinghe did not comment directly on these reports and said he did not know if there were any more orders. But he said Sri Lanka was in desperate need of fuel and was currently trying to get oil and coal from the country’s traditional suppliers in the Middle East.
“If we can get from other sources, we will get from there. Otherwise, (we) may have to go to Russia again, “he said.
Officials are negotiating with private suppliers, but Wickremesinghe said one of the problems they face is that “there is a lot of oil that can be delivered unofficially back to Iran or Russia.”
“Sometimes we may not know what oil we are buying,” he said. “Of course, we see the Persian Gulf as our main source.
Following Russia’s invasion of Ukraine in late February, world oil prices skyrocketed. As Washington and its allies try to cut financial flows in support of Moscow’s military efforts, Russia is offering its crude oil at a big discount, making it extremely attractive to a number of countries.
Like some other South Asian countries, Sri Lanka has remained neutral about the war in Europe.
Sri Lanka has received and continues to turn to many countries for help – including the most controversial, China, which is currently the country’s third largest creditor. Opposition figures have accused the president and the former prime minister of taking a bunch of Chinese loans for huge infrastructure projects that have since failed to generate profits, instead increasing the country’s debt.
Critics also cite a besieged port in the hometown of then-President Mahinda Rajapaksa, Hambantota, built with a nearby airport as part of China’s One Belt, One Road project, saying it costs too much and does too little for the economy. .
“We need to identify the projects we need for economic recovery and take out loans for these projects, whether from China or others,” Vikremesinghe said. The question is where to deploy resources?
The prime minister said his government was in talks with China to restructure its debts. Beijing had earlier offered to give the country more money, but was reluctant to reduce the debt, probably for fears that other borrowers would seek the same relief.
“China has agreed to enter with other countries to ease Sri Lanka, which is a first step,” Wikremesinghe said. “This means that they all have to agree (on) how the redundancies should be carried out and how they should be carried out.
Sri Lanka is also seeking financial assistance from the World Food Program, which may soon send a team to the country, and Wickremesinghe is counting on a rescue package from the International Monetary Fund. But even if approved, he does not expect to see money from the package until October.
Wickremesinghe acknowledged that the crisis in Sri Lanka was “in itself”. Many blame poor government, deep tax cuts in 2019, policy mistakes that devastated the harvest, and a sharp drop in tourism due to the coronavirus pandemic. But he also stressed that the war in Ukraine, which has plunged global supply chains into congestion and pushed fuel and food prices to unbearable levels, has made matters worse.
“The crisis in Ukraine has affected our … economic contraction,” he said, adding that he believes the economy will shrink even more before the country begins to recover and recover next year.
“I think you can see the impact in other countries by the end of the year,” he said. “There is a global shortage of food. The countries do not export food. “
In Sri Lanka, the price of vegetables has tripled, while rice production in the country has fallen by about a third, the prime minister said.
The shortage affected both the poor and the middle class, sparking months of protests. Mothers are struggling to get milk to feed their babies as fears of an impending famine crisis grow.
Wickremesinghe said he felt terrible watching his nation suffer, “both as a citizen and as prime minister.”
He said he had never seen anything like it in Sri Lanka – and did not think he would ever do it. “Basically, I’ve been to governments where I’ve made sure people have three meals and their incomes increase,” he said. “We had a difficult time. … But not so. I have not seen … people without fuel, without food. “
Associated Press authors Bharata Malavarachi and Krisan Francis contributed to this report.
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The Sri Lankan prime minister said he was open to Russian oil
Source link The Sri Lankan prime minister said he was open to Russian oil