Sri Lanka to consider oil purchases from U.S. to reduce trade gap
Colombo, July 21 (Daily Mirror) - Sri Lanka remains ready to consider oil purchases from the United States (U.S.) to reduce the trade gap as a qualification for further reduction of reciprocal tariffs, a Minister who is familiar with trade negotiations said.
Minister of Labour and Deputy Minister of Economic Development Dr. Anil Jayantha Fernando told Daily Mirror in an interview that Sri Lanka’s monthly oil bill amounts to $ 300-400 million, and imports could be considered from the U.S. if it was cost effective .
Also, he said there is a barrier for oil purchases under a government to government deal because no state entity was involved in fuel trading in the U.S.
“We can discuss the possibility of importing oil. We do not import oil from the United States at the moment otherwise. It does not mean that we simply disregard the other tender processes. The cost is a matter for us to consider. While addressing this particular issue, we need to purchase them at a cost, which is similar to the current cost. If that requirement is met, we can do it. Initially, we discussed this. If we want to go for unsolicited or government to government purchases, we have Ceylon Petroleum Corporation. But in the case of the United States, there is no such government entity to sell oil. The entities are private there,” he said.
Sri Lanka’s total fuel imports amounted to $ 4.3 billion last year. The U.S. has slapped 30 percent tariffs on Sri Lankan products entering its market. Doors are, however, open for Sri Lanka to negotiate further till August 1 for further reduction of the rate.
In 2024, Sri Lanka's exports to the U.S. totalled $3 billion, while imports from the US were $368.2 million, resulting in a trade surplus of $2.6 billion in favour of Sri Lanka. The US is Sri Lanka's largest export market, accounting for 27% of Sri Lanka's total exports. Key Sri Lankan exports to the US include garments.
The Ceylon Petroleum Corporation (CPC) has sought a sample of WTI crude oil used in the U.S. for a specification test. Sri Lanka imports 180,000 tonnes of crude oil and nearly 200,000 tonnes of refined products. It takes nearly 21 days for a shipment of fuel cargo from the U.S. to arrive. However, the U.S. companies are ready to participate in the tender process here for the supply of fuel, according to a CPC source.
