President Mahinda Rajapaksa says, Sri Lanka’s oil import bill during this year is expected to hit a record US$ 6 billion, equal to the amount, the country gains from foreign remittance.
This is compared to US$ 4.63 billion, the Island nation incurred for importing oil during the year 2011 and US$ 3.10 billion spent in 2010.
Rajapaksa says, this situation, a result of high oil prices in the global market, is draining out the limited foreign reserves, the country has.
Reading the 2013 Budget in the parliament, President warned that this situation might result in government having to limit subsiding high oil prices in the local market.
“Corrective measures required to be taken to address these challenges are politically difficult but as a responsible Government we need to take such measures, in the interest of financial stability and development”, Rajapaksa told parliament.
Local energy sector primarily depends on imported fuel, as it does not produce any oil and it also use large quantities of oil to generate electricity via oil powered plants.
President, who is also the Finance Minister of the country says, there is also a danger in relying on oil based power generation strategies.
Sri Lanka, primarily imports its crude oil content from Iran and due to the economic embargo’s imposed by USA on the Middle Eastern country, oil supplies to Island has dried down, which also caused the closure of the Sapugaskanda refinery for several days.
As of now Cairn Lanka, an Indian based firm is carrying out oil exploration activities in the Gulf of Manner Basin to explore potential oil deposits in the country.
According to the company, it has already made successive gas and condensate discoveries.
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