- There have been no solutions found to the local aviation industry’s jet fuel shortage and fund repatriation issues.
- A Cabinet proposal to allow holders of bunker fuel licenses to import jet fuel appears to be dead on arrival.
- Airlines have reduced air seat capacity to Sri Lanka by 53% in recent months as they carry extra fuel for return flights.
- Due to issues with fund repatriation, Sri Lanka and Pakistan have been
With no credible solution in sight to resolve the country’s aviation industry’s jet fuel shortage and fund repatriation issues, several airlines are considering suspending operations to Sri Lanka, jeopardizing the tourism industry’s recovery, which is dependent on air connectivity.
The Cabinet of Ministers approved a joint proposal last month to allow registered bunker holders with the Sri Lanka Ports Authority (SLPA) to import, supply, and sell Jet A-1 aviation fuel. This was done to keep aviation services running after Ceylon Petroleum Corporation (CPC), which has a monopoly on fuel supply, was unable to import the necessary jet fuel due to the currency crisis.
However, due to a variety of issues, bunker fuel license holders have yet to act on the proposal, according to a leading bunker fuel license holder. He stated that the jet fuel (jet A1) trade has a unique supply chain that necessitates the identification of new suppliers willing to provide jet fuel on a minimum 30-day credit basis.
“It’s extremely difficult. One solution is for four or more bunker fuel license holders to form a consortium and begin importing. Furthermore, they must obtain a line of credit from suppliers for a minimum of 30 days. As a result, they can refuel planes, collect payments in US dollars, and pay suppliers.
According to BIA officials, there are currently no plans to bring in jet fuel via CPC or any other alternative method.
“Potential mechanisms and models exist, but nothing has been done.” Flights are being diverted to other airports. As of now, some airlines have already withdrawn, and others are considering doing so. “Once they pull out, it will be very difficult to get them back,” a BIA official explained.
Local airline representatives have failed to remit approximately US $200 million in funds collected from ticket sales owed to their principles through