Last week, the United States Trade Representative came to Sri Lanka and met President Anura Kumara. They came to discuss the agreement reached on tariffs imposed on Sri Lanka by President Trump. Trump had significantly reduced the tariffs imposed on Sri Lanka. What Trump expected from Sri Lanka in return for that has not yet been revealed regarding Sri Lanka’s commitments. The U.S. trade representatives may have come and met Anura Kumara to discuss that matter.
After those trade representatives arrived in Sri Lanka, the Chairman of the Ceylon Petroleum Corporation stated that the tests conducted before purchasing oil from America had been successful. Accordingly, he had announced that tenders would be called from next month to import oil from the United States, as per media reports.
It was reported that Sri Lanka had agreed to purchase oil from the United States to obtain the tariff reductions granted by Trump. The U.S. trade representatives may have come to implement that commitment. It is possible that the CPC Chairman made the statement about purchasing oil from the U.S. after the trade representatives’ visit for that reason.
Not only has the U.S. been selling American oil to Sri Lanka, but it has also submitted several proposals for energy projects in the country. Among them, Kerawalapitiya and Sapugaskanda are the main ones. During Mahinda’s government in 2014, a joint company called Ventech Engineering, based in the United states with an Arab Emirates company, submitted a proposal to expand the Sapugaskanda oil refinery. CPC officials declared this a major achievement. But after Mahinda’s defeat in 2015, that project was abandoned. Later in 2019, during the Maithri–Ranil government, the project to modernize the Sapugaskanda refinery was handed over to an American company called Honeywell UOP, which had been initially involved in designing the Sapugaskanda refinery.
However, after the Maithri–Ranil government collapsed, that project too was stopped.
After that, during Gotabaya’s government, an agreement was signed to lease a portion of the Kerawalapitiya Yugadanavi power plant to the American company New Fortress Energy. But due to opposition from ministers within the government itself, that agreement was later cancelled. Now again, the U.S. has submitted a new proposal for Kerawalapitiya.
It is uncertain how China and India, the main stakeholders in Sri Lanka’s energy projects, will view the U.S. entering Sri Lanka’s energy sector through Trump’s tariff policy.
By Upul Joseph Fernando
