Oct 25, Colombo: The Sri Lankan government says it will discuss with the United Nations and several foreign countries the petroleum crisis the island is facing due to the sanctions imposed on Iran by the United States as Sri Lanka is incurring an additional cost of US$ 1.2 billion for importing refined fuel.

Sri Lanka cabinet spokesman, Media Minister Keheliya Rambukwella responding to a media query on the temporary suspension of operations at the Sapugaskanda oil refinery at a press conference said the government expects to hold discussions on the issue with the UN, US and the European Union.

Sri Lanka's petroleum authority, Ceylon Petroleum Corporation (CPC) has decided to switch off the nation's only oil refinery in Sapugaskanda due to shortage of supplies of Iranian crude oil.

Minister Rambukwella, noting that a punishment imposed on one nation had affected others adversely, said discussions will be held to find a solution to Sri Lanka's oil crisis brought about by the sanctions.

The Petroleum Resources Minister Susil Premajayantha responding to questions revealed in the parliament today that US sanctions imposed against Iran have made it difficult for Sri Lanka to obtain crude and importing refined fuel to avert shortages of fuel in the country has caused Sri Lanka to incur an additional cost of US$ 1.2 billion.

The Sapugaskanda oil refinery, which processes 50,000 barrels of crude per day, is built to refine only Iranian crude. Major changes to the refinery are needed for it to process crude oil from other sources.

In June, the United States exempted Sri Lanka along with six other countries from financial sanctions after they have agreed to reduce their imports of Iranian oil.

The CPC said it has been compelled to reduce the number of ships carrying crude oil to Sri Lanka from Iran due to the US sanctions.

The authorities have discussed the modernization of the refinery with several countries and plans to have discussions with China for help.