Oil Buddies

December 18, 2006 (LBO) – Sri Lanka is scouting for international experts to help the island hedge part of its hefty oil bill next year, Petroleum Minister A H M Fowzie said Monday. A net oil importer, Sri Lanka’s retail fuel market is dominated by state oil giant Ceylon Petroleum Corporation (CPC), while Indian fuel retailer Lanka IOC, commands a third of the market.

“We are going to call for expressions of interest from international experts to help us, so that we can mitigate some part of our oil import bill next year,” Fowzie told LBO.

Sri Lanka, which presently buys fuel at around 60 dollars a barrel, is looking to hedge prices at around 55 dollars to 58 dollars a barrel, he said.

The island’s oil import bill is due to top 2.2 billion dollars this year the central bank said recently, up from 1.6 billion dollars paid out in 2005.

“A final decision on when to start hedging, will depend on Presidential approval. But we are very keen to get it started sometime early next year,” he said.

The island’s central bank, a prime mover behind this initiative, has suggested CPC route its hedging purchases by using the New York Merchant Exchange or the Futures Excha