Crisis-hit Sri Lanka allows companies to pay in dollars to obtain weekly fuel supply

Sri Lankan companies will be able to purchase fuel on a weekly or daily basis if they are able to pay for the commodity in dollars one-month in advance, Minister of Fuel and Energy Kanchana Wijesekera said, as the crisis-hit country scrambles to find dollars to pay its bills.

From July 12, any company that has the ability to pay for its fuel requirements can open a consumer account at Ceylon Petroleum Corporation to obtain a guaranteed quota.

“They need to pay a month in advance & fuel will be issued on a daily or weekly basis from the 12th (July). Already paid customers will receive their quota from the 12th,” Wijesekera said on Sunday (July 03).

Sri Lanka’s fuel stocks have almost run dry while the fuel queues continue to grow.

Related: Sri Lanka reveals low fuel stock levels

Previously, the minister said that the country’s money-printing central bank shot down a proposal to allow a few fuel stations to sell petrol in dollars on the grounds that dollars cannot be used for internal transactions at retail levels.

The minister highlighted that the state-run national carrier SriLankan Airlines and exporters were already paying for fuel in dollars, which is helping the CPC’s currency reserve.

Some new suppliers had previously asked for upfront payment to supply fuel while foreign banks are refusing to confirm Sri Lanka’s letter of credit.

Related: Foreign banks refuse to confirm Sri Lanka state bank letters of credit: Minister

Suppliers like Petro China, who used to give Sri Lanka 180 days of credit through LCs, are now asking for advance payment, Minister Wijesekera said.