Sri Lanka and the Islamic Republic of Iran have enjoyed friendly and cordial relations for decades. Historians have reported that Persian traders from Colombo engaged in trade along their ‘Silk Route’ to China since ancient times. In the past, Iran was known as ‘Persia’, a land with a great history spanning centuries. Ancient Persian coins and various other artefacts are also displayed at the UNESCO World Heritage Cultural Centre in Sigiriya. In this way, the friendship between present-day Iran and Sri Lanka is very old and can be considered a special one. This friendship was further strengthened later through the oil (crude oil) trade transactions carried out with Iran…’ Sri Lanka Latest News
What is this story that speaks of an ancient relationship between Sri Lanka and Iran? Who is telling this story? This historical background is revealed by Mr. Omar Kamil, a Sri Lankan politician as well as a diplomat. He is someone who has remained in the country’s politics for several decades, and he became well known for serving as the Mayor of Colombo for many years. Elected as a member of the Colombo Municipal Council in 1979, Omar Kamil was later elected as Mayor of the Colombo Municipal Council in 1999, twenty years later. He held that position from 1999 to 2002 and was again appointed as Sri Lanka’s Ambassador to Iran in 2003. After Iran, Omar Kamil was also appointed as Sri Lanka’s Ambassador to Saudi Arabia. Now 76 years old, Mr. Omar Kamil recently revealed his diplomatic experiences in Iran through an article written for an English newspaper, disclosing his role as Sri Lanka’s Ambassador to Iran. In it, he described the diplomatic work he carried out in Iran. His reflections are particularly important at a time when an Iran–America war has begun. In this context, the details he revealed regarding Sri Lanka’s crude oil trade with Iran are significant.
‘For more than 25 years, Sri Lanka imported crude oil from Iran for the Sapugaskanda oil refinery. During my tenure as Sri Lanka’s Ambassador to Iran starting from January 2003, a request was made to me by then Minister of Power and Energy Karu Jayasuriya and Chairman of the Ceylon Petroleum Corporation Dhamma Wimalasena, asking me to obtain concessionary prices for diesel and furnace oil from the National Iranian Oil Company. They were aware that I was familiar with the language of commerce and trade. The Ceylon Petroleum Corporation imported 75% of Sri Lanka’s crude oil requirement from Iran over the past 25 years. For this, a bank guarantee had to be provided to the People’s Bank of Sri Lanka through an international bank. The Petroleum Corporation spent over Rs. 100 million annually as commission fees for this process. Meanwhile, in March 2003, due to the United States military action in Iraq, global oil prices rose from USD 20 per barrel to USD 100, placing additional pressure on oil-importing countries like Sri Lanka. Ministers Karu Jayasuriya and Chairman Dhamma Wimalasena were keen to obtain relief regarding the bank guarantee requirement…’
Mr. Omar Kamil’s explanation continues further:
‘I discussed this situation with the then Deputy Foreign Minister of Iran responsible for economic affairs. I strongly appealed to reconsider the bank guarantee requirement, as our (Sri Lanka’s) letters of credit had never defaulted over the past 25 years. The Minister responded positively and said he would recommend this to the Governor of the Central Bank of Iran. He also asked me to further discuss the matter with the Central Bank Governor of Iran. I contacted Central Bank Governor Dr. Shambani and requested reconsideration of the bank guarantee requirement. Although a bank guarantee was a prerequisite for Iranian oil exports to all SAARC countries including India, he informed me that Sri Lanka would be given special consideration due to its long-standing relationship of more than a quarter century with the Iranian Oil Company. Accordingly, on 09 December 2003, the Governor of the Central Bank of Iran sent an official letter to our Central Bank Governor A.S. Jayawardena informing him of the waiver of the prime bank guarantee requirement. This achievement resulted in significant foreign exchange savings for Sri Lanka…’
‘Central Bank Governor Jayawardena and Petroleum Corporation Chairman Wimalasena, through letters dated 26 January 2004 and 23 January 2004 respectively, appreciated my efforts in successfully resolving this matter with the Central Bank of Iran. Regarding our request for crude oil and diesel furnace oil on deferred terms, I also met Deputy Minister of Petroleum Hussein Najad, who had served as Iran’s Ambassador to the United Nations in 1991. The Minister recalled Sri Lanka’s position during the vote against the US-UK sponsored joint resolution titled “Zionism is Racism”, which called for its repeal. He also noted Iran’s appreciation of Sri Lanka’s stance on the Palestinian issue. In 1991, during the submission of this resolution to the United Nations, then President Ranasinghe Premadasa stated that it should comply with UN Resolution 242 of 1967 and that they should return to their pre-1967 borders as unanimously agreed by the United Nations. President Premadasa firmly maintained his position. These arrangements initially for three months and later extended to six months helped Sri Lanka overcome foreign exchange difficulties. Through these arrangements, trust and goodwill between Sri Lanka and Iran were re-established…
Priyantha Hettige
