Sri Lanka to shut Kelaniya refinery again on forex woes

Sri Lanka will temporarily shut its sole 50,000 b/d Kelaniya refinery again because of the prevailing foreign exchange shortage in the country, its energy ministry said.

The 51-year-old Kelaniya refinery, which is operated by Sri Lanka's state-controlled Ceypetco, was shut in mid-November but was restarted earlier this month.

The refinery will be shut again on 3 January, because of difficulties in purchasing crude oil on the back of the prevailing foreign exchange crisis, and will resume operations before the end of the month, the ministry said. The refinery processes Abu Dhabi light sour Murban crude.

The purchase of alternative crude oil as an emergency measure failed because of the foreign exchange shortage, while the fall in the country's credit rating has made it difficult to buy crude on a credit basis, the ministry said. But it assured that the temporary closure of the refinery will not create a fuel shortage in the country.

Sri Lanka consumes around 110,000 b/d of oil products but produces only about 35,000 b/d at the refinery.

By Sathya Narayanan