U.S. move hits small nations: Rajapaksa

January 31, 2012
R. K. RADHAKRISHNAN
Sri Lankan President Mahinda Rajapaksa. File photo
As the United States' and European Union's combined sanctions against Iran take effect, small nations like Sri Lanka are extremely worried. Sri Lanka depends almost entirely on Iran for its crude oil supplies and the only refinery in the country, Sapugaskanda, can only process Iranian crude.

“We are discussing what we should do,” Sri Lankan President Mahinda Rajapaksa said when asked what the country's options were at an interaction with foreign correspondents based in Colombo at his official residence, Temple Trees.

The Iranians provide a seven-month credit facility, and 93 per cent of the crude comes from Iran. A major part of the crude is converted to fuel oil at Sapugaskanda, a facility put up in the sixties and which is in dire need of renovation. Fuel oil powers the turbines to produce electricity.

ALTERNATIVE NEEDED

“We need an alternative. Finally they [the U.S. and the West] are not punishing Iran. They are punishing us, small countries,” said Mr. Rajapaksa. Asked if Sri Lanka is considering approaching the U.S. for a waiver of the sanctions, he said: “We might. Otherwise how do we survive?”

Asked if the U.S. Embassy in Colombo had written to the Central Bank of Sri Lanka asking it not to make dollar payments to Iran, Central Bank Governor Ajith Nivard Cabraal said the general sanctions had been notified. “There has been no real interaction so far,” he said.

Mr. Rajapaksa said Sri Lanka was also considering approaching China and India for help.

Asked if Sri Lanka will follow the example set by India — India has said it will be guided only by U.N. sanctions and not U.S. sanctions — he said this had to be studied.

On the question of modernising the refinery, Mr. Rajapaksa said discussions were on with a few countries, including Canada and the Czech Republic. In fact, the Czech Export Bank had, last year, written to the Ceylon Petroleum Corporation, detailing its interest in participating in modernisation of the plant.

Meanwhile, the U.S. Assistant Secretary of State and former U.S. Ambassador to Sri Lanka, Robert O' Blake, is expected to visit Colombo and hold discussions with leaders here. Also expected is the much-delayed visit of an Indian Petroleum Ministry delegation in the first week of February.