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Bankrupt Sri Lanka, which said it has less than a day of fuel left looking to buy cheap Russian oil

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Sri Lanka is running out of fuel. Ishara S. Kodika
Sri Lanka is running out of fuel. Ishara S. Kodikara/AFP/Getty Images
  • Sri Lanka is planning to send an official delegation to Russia to negotiate oil purchases.
  • On Sunday, Sri Lanka's energy minister said it had less than a day's worth of fuel left.
  • Sri Lanka's prime minister told TASS a delegation will visit Moscow next week to discuss oil deals.
  • For more stories go to www.BusinessInsider.co.za.

Sri Lanka is planning to send an official delegation to Russia to negotiate oil deals as the South Asian country faces a crippling fuel shortage amid an economic crisis.

The island nation with a population of 22 million is running out of foreign exchange reserves while its currency has lost more than half its value against the US dollar this year, making the import of critical supplies difficult. Shortages from fuel to food to medicines are running rampant, spurring protests.

On Sunday, Sri Lankan energy minister Kanchana Wijesekera said there's less than a day's worth of fuel left in the country, according to the BBC. The announcement comes after the country restricted the sale of fuel to essential businesses for two weeks starting on Wednesday.

To manage the crisis, Prime Minister Ranil Wickremesinghe's administration is seeking to buy Russian oil and will be sending a delegation to Moscow soon, according to various media outlets.

Wickremesinghe told Russian state news agency TASS on Monday that a minister-led team will visit Moscow next week "to discuss further on how to obtain oil from Russia."

"We would take Russian oil. I think already Russian oil has come to Sri Lanka," Wickremesinghe told the outlet in an exclusive interview.

Although purchases of Russian energy products undermine sweeping sanctions against the country over the war in Ukraine, they are not in violation of US or European Union sanctions. That's because these trade restrictions do not forbid buyers outside US and EU jurisdictions from buying Russian oil — which is now priced at record discounts against other grades, as per Reuters.

A Sri Lankan minister was in Qatar last week to negotiate energy deals, while another was expected to head to Russia, Reuters reported last week.

Wickremesinghe told the Associated Press in June the country may just have to buy from Russia. "If we can get from any other sources, we will get from there. Otherwise (we) may have to go to Russia again," he said, as per the AP.

In May, Sri Lanka received Russian oil and was also looking to import other fuels such as coal, diesel, and gasoline from the East European country, the AFP reported.

Sri Lanka said it would stop paying external debt in April as it needed its foreign reserves to pay for the import of essential goods. The country defaulted on $78 million of debt in May. It's in talks with the International Monetary Fund to secure a bailout.

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