Sri Lanka needs 1,285 million US dollar for oil imports in the next three months, of which 500 million will come from an Indian credit line, Energy Minister Udaya Gammanpila said, as the country grappled with forex shortages and global prices went up.

“For the next three months we have forecasted 1,285.5 million US dollars for oil imports,” Energy Minister Udaya Gammanpila said.

“We hope to get 500 million dollars from the credit line from India. We are talking to others we will tell parliament when we finalize them.”

The 500 million dollar credit line to be activated in April is a one year facility at 2.5 percent.

India this month gave consignment of diesel on an appeal by Sri Lanka ahead of the credit line being used officially.

He said oil prices were around 40 to 45 US dollars a barrel in 2020, about 55 to 65 in 2021 are around 90 to 100 million dollars in 2022 so far with Russian invasion of Ukraine pushing prices up, he said.

Brent crude had moved up to 101.40 dollars as he spoke.

As of February 24, Sri Lanka had following stocks of fuel:

Petrol 92 – for 10 days

Petrol 95 -for 40 days

Lanka Auto Diesel 08 days

Super Diesel – 8 days

From a ship that is now being unloaded 5000 metric tonnes of diesel would be given to the Ceylon Electricity Board and 4,200 MT to the Sojitz power plant, which would be enough to run it for six days, he said.

“Some stocks are also coming in the future,” he said.

Each week two to three ship come based on the projected fuel needs of the country, based on which tenders have been floated. However unloading of tankers have been delayed due to forex shortages.

Sri Lanka usually has stocks for 15 to 21 days before the forex crisis, Energy Ministry Secretary K D Olga has said.

Sri Lanka has been struggling to find foreign exchange to pay for oil with liquidity injections being made to keep interest rates down after giving reserves for imports.

When foreign reserves of a pegged central bank (which are savings) are given for imports, an equivalent fall in rupee reserves must take place in commercial banks to keep the economy in balance.

However in a pegged central bank with a policy rates, money is printed an re-inserted to banking system (sterilized reserve sale) preventing a correction in credit, the balance of payments and driving imports and economic activity to an unsustainable level.

Sri Lanka is now trying to get credit lines for fuel, instead of market pricing and offsetting domestic consumption and non-oil imports.

Credit lines (domestic consumption financed by foreign borrowings) will further widen the external current account deficit and national debt.

The Mercantilists who print money or finances budget deficits with foreign borrowings and state enterprises with credit lines then jump up and say there is a current account deficit or a ‘twin deficit’ in a country where private citizens are net savers.

Justice Minister Ali Sabry, PC, says a decision on the Prevention of Terrorism Act (PTA) will be taken by the Cabinet of ministers and Parliament.

Minister Sabry said so when The Island sought his response to the declaration by the HRCSL (Human Rights Commission of Sri Lanka) that the PTA should be abolished. He said, “Any individual or an organisation is free to express opinions. Ultimately, the Cabinet of ministers and the parliament shall decide taking all concerns into account.”

The five member-HRCSL, in a statement issued on 15 Feb, following consultations with the Colombo-based diplomatic community, declared: “Notwithstanding the amendments already suggested by the government, the HRCSL advocates the complete abolition of the PTA. The Commission believes that the offence of terrorism should be included in the Penal Code with a new definition for terrorism. It is explicitly for those who threaten or use violence unlawfully to target the civilian population by spreading fear thereof to further a political-ideological or religious cause. The Commission advocates that terrorism should be investigated under the General Law of the country with necessary amendments. The Commission also supports that it is not required to exclude the application of the Evidence Ordinance for the offence of terrorism. The indefinite period of detention violates the Constitution. “Deprivation of liberty of a person pending investigation or trial shall not constitute punishment” (Article 13 (4). Amendments to the Penal Code, the Code of Criminal Procedure Code. Judicature Act and the Bail Act require modifications for this purpose.”

Foreign Minister and former internationally recognised law professor G.L. Peiris said that the PTA was being amended with the objective of bringing it in line with international norms and best practices. According to the academic the PTA was being amended after lengthy deliberations over several months and the proposed amendments were an initial step towards the promulgation of a more comprehensive anti-terror legislation.

The FM explained that substantive amendments to the PTA included amendments to the sections on detention orders, restriction orders, expressly recognizing judicial review of orders, expeditious disposal of cases of those charged to avoid long term detention, repealing sections impinging on freedom of expression and introduction of provisions on access by magistrates and judicial medical officers, prevention of maltreatment and torture during the detention period, right to communicate with the family, grant of bail to long term detainees and day to day hearing of cases.

Sri Lanka is in talks with banks in the Middle East for financial facilities amounting to two billion US dollars, State Minister for Samurdhi and Micro-Finance Shehan Semasinghe said.

“Discussions have been initiated with banks in the Middle East for 2.0 billion dollars in financial facilities,” Minister Samarasinghe told parliament.

“Successful results are starting to emerge.”

Sri Lanka is seeing pressure on the rupee peg of 200 to the US dollar, depletion of foreign reserves and parallel exchange amid liquidity injection made to maintain low interest rates.

Sri Lanka has 6.9 billion US dollars of foreign exchange denominated debt to be paid, including to domestic holders.

Sri Lanka repaid a 500 million US dollar sovereign bond in January and a billion dollar bond remains to be paid in July.

Gross foreign reserves were down to 2.3 billion US dollars in January. From October, foreign reserves started to be used for imports, which requires more money printing to keep rates down. Fuel shortages have started to emerge.

Some 40 Sri Lankans stashed away around US$ 50 million in secret Swiss bank accounts, according to details made available exclusively to the Sunday Times by the US based International Consortium of Investigative Journalists (ICIJ). The details were obtained by the ICIJ from the French newspaper Le Monde and led to many collaborative projects by the ICIJ in what came to be known as Swiss Leaks. The Sri Lankans are among 100,000 clients of the HSBC Private Bank (Suisse) worldwide. The names and account details are in a trove of 60,000 leaked files covering up to 2007. The highest amounts remaining in the accounts during 2006-2007 under different Sri Lankan names are available.

The largest amount is in the name of Edmund Wijenaike Balasuriya and members of his family. Mr. Balasuriya is described in bank documents as the “owner of a shop of games” with an address in Colombo north. The Balasuriya family amounts listed in the balances add up to US$ 16,325,742 which at today’s exchange rate works out at more than two billion rupees. Together with his wife, his account balance is shown as US$ 10,668,094. The balance in the name of his daughter Lakshmi Fernando is listed as US$ 1,989,370. His son Rohan Balasuriya, the records show, has a balance of US$ 1,975,594. Three other sons – Mahendra, Lakshman and Asoka – reflect the same balance of US$ 1,975,319 each in accounts under their names.

Documents from the HSBC describe the Balasuriya family as being “good clients of ours for many years and retain an account in Barclays Bank Suisse holding several million dollars.” Among some 17 Sri Lankans whose names appear as having closed their accounts are Jeevaka Lalith Bhupendra Kotelawala, the holder of the country’s highest national honour – Deshamanya — and head of the beleaguered Ceylinco Consolidated. His Golden Key Credit Card Company collapsed in 2008 owing millions of rupees to clients who are still fighting court action.

Mr. Kotelawala opened his account on December 21, 1988 and closed it on March 3, 1997. Also opened and closed on the same dates was an account in the name of Daya Ranjit Senanayake, described in Colombo business circles as Mr. Kotelawala’s deputy at one time. The Sunday Times is in possession of all details related to the Sri Lankan secret account holders. They include their IBAN (International Bank Account Numbers), dates of birth, listed addresses, dates of opening of account, dates of closure and other related details. Whilst some operated accounts giving Sri Lankan addresses, they were found to be residents in countries including Australia, Britain and Canada. At least one was an attorney representing a ‘client.’

Exchange Controller D.M. Rupasinghe declined to comment when the Sunday Times asked whether Sri Lankans were allowed to open bank accounts overseas, particularly secret offshore accounts. He only cited the Exchange Control Act which requires the permission of the Central Bank (CB). Another high ranking CB official who spoke on grounds of anonymity said no clearance was given for any Sri Lankan to operate offshore “secret” accounts since they were illegal and a mechanism to avoid tax payments.

The HSBC Private Bank (Suisse) was accused of knowingly aiding thousands of individuals to evade taxes and break other financial laws of a number of countries. The bank’s Chief Executive Officer, Stuart Gulliver, extended his “sincerest apologies” after his bank was charged with helping clients conceal their identities to avoid taxes on deposits. The apology was printed as large advertisements in British and other foreign newspapers.

The second highest amount in the secret accounts is held in the name of Subramaniam Surendran, a Colombo businessman and his wife. He is described in local trade circles as one who did a large volume of business with the Ceylon Electricity Board (CEB). They are shown together in two separate accounts as holding US$ 13,129,904. While his balance is reflected as US$ 6,564,952 in two accounts, his wife Charlotte Ranjitha, described as a ‘housewife’ held a balance of US$ 6,495,287.

The names of others who are listed as holding large sums are Anura Leslie Perera (Bandarawela) US$ 1,692,959. He is described as an attorney and was reportedly representing an account holder. Others are Aruna Rajendran Vasvani (Colombo) US$ 1,384,149, Nikhil Kishore Hirdaramani (Colombo) US$ 817,446, Vinod Kishore Hirdaramani (Colombo) together with Leena Vinod Hirdaramani US$ 646,243