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Iran begins $1.2 billion upgrade for Sri Lanka refinery

Oil & Gas Journal

The Sri Lankan minister added that his country also needed a cracker to convert crude oil into diesel and gasoline which would cost the government some $400 million. He asked the Saudi oil minister to request funds from the Organization of Petroleum Exporting Countries to enable Sri Lanka to purchase the facility.

The importance of the refinery upgrade was underlined in January when Sri Lanka, which has to import all of its oil needs, saw its trade deficit double to $610.8 million as higher oil import costs exceeded export gains.

Sri Lanka bought $302.1 million worth of oil in January, when the island's sole refinery shut down for upkeep work, compared to $54.2 million a year earlier.

In February, the Sri Lankan central bank said the country's trade deficit widened to $3.56 billion in 2007 from $3.37 billion in 2006 due to the high cost of importing petroleum products. It said the country's oil import bill stood at $2.49 billion for 2007, a 20.6% increase over the cost of imports in 2006.