Govt. expresses ‘relief’ at US exemption from Iran oil imports

Thursday, 14 June 2012 00:50 - - {{hitsCtrl.values.hits}}

The Government has expressed ‘relief’ over a US decision to exempt it from financial sanctions placed on countries that import oil from Iran, a top official said yesterday.

Presidential Secretary Lalith Weeratunga expressed relief over the exemption given to Sri Lanka since around 90 per cent of the country’s oil is imported from Iran with the remainder coming from Saudi Arabia and Oman.

The United States on Tuesday announced it would exempt seven emerging economies including India from tough new sanctions after they cut back on oil from Iran.

US Secretary of State Hillary Clinton added India, Malaysia, South Africa, South Korea, Sri Lanka, Turkey and Taiwan to the list of those exempt from the sanctions. In March, she made exemptions for European Union nations and Japan.

Under a law approved last year that irritated some US allies, the United States starting on 28 June will penalise foreign financial institutions over transactions with Iran’s Central Bank, which handles sales of the country’s key export.

However, Weeratunga declined to answer questions on whether a decrease in global oil prices would result in a price reduction at home.

“We are not sure whether prices will remain low. Oil stocks that were previously bought at higher prices still need to be distributed so we are still discussing whether a price decrease will happen,” he said.

The issue of forward bought oil stocks together with growing debt of the Ceylon Petroleum Cooperation (CPC) was also mentioned by Petroleum Minister Susil Premajayantha in Parliament as the main reasons for not immediately reducing local prices.

However opposition parties have faulted the Government for delaying a price reduction insisting that the concession should be passed onto consumers.