Sapugaskanda refinery to close down as crude oil shipment has not arrived

(Lanka-e-News -13.May.2013,11.30PM) The Sapugaskanda refinery is to be closed down again because the shipment of crude oil had not arrived, according to reports reaching Lanka e news. This closure could take place tonight or tomorrow , inside sources say.

The necessary amount of crude oil is almost finished for refinement , and the ship with the oil cargo was scheduled to arrive on the 25th , but over some issue the arrival is not certain now. Due to this , the work at the refinery had diminished .As at today the work at zone one and zone two had ground to a complete halt. It is diesel and petrol that are being refined in those zones now..

Previously, on two occasions because of the non availability of crude oil the Refinery had to be closed down. When the refinery is closed down and re opened later , large amounts of public funds go down the drain .

It is the consensus among all that while the new Minister of petroleum resources Anura Priyadharshana Yapa is enjoying watching video films at his home , his Ministry is functioning at snail’s pace.

harshana Yapa is enjoying watching video films at his home , his Ministry is functioning at snail’s pace. Has IMF Medicine Become Irrelevant In Sri Lanka? Maybe Not By W.A Wijewardena -May 14, 2013  Dr. W.A. Wijewardena The Central Bank: Easing the monetary policy is the best Sri Lanka’s Central Bank cut its two basic interest rates last week – its REPO rate or Repurchase rate that it uses to crunch the excess liquidity in the market and its Reverse REPO rate used for pumping money to the system to stimulate the economy – by historic half a percent. Accordingly, REPO rate now stands at 7 per cent per annum and Reverse REPO rate at 9 per cent. The Bank in its press statement has said that it has taken this measure “to stimulate the domestic economy, particularly in the light of the gradual moderation in headline inflation and subdued demand pressures in the economy”. The Bank has also claimed that it could now push the economy back to a high growth path by increasing money but without permitting the inflation to raise its ugly head once again. The Bank has named this extraordinary skill as ‘policy maneuverability’ which means that it can increase money supply adequately to promote growth but it also can cut that money supply at the appropriate time if it leads to unwarranted inflation. If a parallel example is used to explain this skill, it goes as follows: There is a diabetic who is clumsy and lazy because he does not get sufficient energy due to cut in sugar intake. Then, there is a smart physician who increases his sugar intake sufficiently so that he becomes active again. Now, if that sugar level in his blood increases to dangerous levels, the physician is said to be able to cut the sugar without harming the diabetic. The ability to change the sugar level in the diabetic just at the appropriate time from more sugar to less sugar to attain the particular goal is called ‘policy maneuverability’. This micro management is easy for a single diabetic. But if all are diabetic, it may not easy as it is claimed. IMF: Don’t ease monetary policy Two days before the Central Bank went for this historic policy maneuverability experiment, the Executive Board of the International Monetary Fund or IMF issued a warning to Sri Lanka in its routine country assessment report. While emphasising on the need for having a holistic approach to solving the country’s alarming economic problems, IMF cautioned against the easing of monetary policy in the next few months and advised that the exchange rate should not be defended aggressively. What it meant was that the Central Bank should not cut its interest rates and promote credit in the hope of stimulating the economy (or giving sugar to the diabetic) and sell foreign exchange from its reserves in the market to prevent a natural fall in the exchange rate. Its policy advice covered a broad range of activities. It said that Sri Lanka should watch inflation closely to prevent it from rising again, reduce unwarranted growth in bank credit, improve the budget by increasing tax revenues and avoid guaranteeing the foreign exchange borrowings which the Sri Lankan banks have been raising recently with the blessings of the Central Bank. Coupled with these good overall economic management policies, IMF has said that the country should have a proper policy package to promote foreign direct investments or FDIs. Two opinions by two doctors                                                      Read More