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US likely to allow import of crude oil from Iran

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Despite the US embargo, the US government has tentatively agreed to allow Sri Lanka continue importing crude oil from Iran because of Sri Lanka?s satisfactory performance in the wake of trade sanctions, a senior Ceylon Petroleum Corporation (CPC) official said yesterday.

He told Daily Mirror he was joined by External Affairs Ministry officials at talks with a US State Department representative Miss Alison in Washington with the intention of easing the sanctions on Sri Lanka.

?The US government is glad that Sri Lanka reduced the import of Iranian crude oil from 14 shipments to 10 during the trade embargo. Therefore, the US is ready to allow Sri Lanka to import 10 shipments of Iranian Light for the use of Sapugaskanda Oil Refinery (SOR) as only Iranian crude oil is suitable for the purpose,? Mr. Siva said.

But he said there were other issues to be addressed before resuming the import of crude oil from Iran as a result of the trade embargo.
Mr. Silva said Sri Lanka was not in a position to import crude oil from Iran until the issues pertaining to freight insurance, bank transactions and LOC which have been restricted in respect of trade with Iran.

He said Sri Lanka was in the process of sorting out these problems with the State Department and a final decision was expected at the end of this month when Miss Alison visited Sri Lanka once again for further discussion on the matter.

The government has contacted the Sultanate of Oman and Saudi Arabia to purchase crude oil to fill the gap as Sri Lanka requires 14 shipments of 135,000 metric tons each of crude oil annually. The agreement with Oman is expected to be signed shortly

The SOR was designed by Iranian in such a way that it could refine only Iranian Light produced by that country. The SOR refines 6,000 metric tons of Iranian light a day and after the recent repair work, the refinery runs at 80 per cent capacity.

Mr. Silva said there was no fuel crisis right now and ample stocks were available.

He said CPC would not increase fuel prices though the IOC increased their petrol and diesel prices recently and added that the IOC fuel price increase would not have a big impact on the local market as CPC is the market leader with 95% market share

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