Courtesy The Daily Mirror

Energy security is a topic that has been discussed for years, if not decades. It is sensible for any government, policymakers and independent analysts to engage in it. Indeed, reams have been written on the subject. Still, rhetoric has not been translated into action here, and Sri Lanka remains highly vulnerable to external shocks.

With the Middle East war, triggered after the US-Israel attack on Iran, continuing to rage, Sri Lanka – which entirely imports its fuel requirements – feels the importance of energy security more than ever. Nevertheless, this is not the first time the issue has been felt acutely. It was experienced in the worst manner during the pandemic. Oil price surges have had a cascading effect on the local economy at different points in history.

Today, oil prices have spiked in the global market following disruptions in the Strait of Hormuz, the narrow sea lane responsible for the transfer of one-fifth of global oil production. Gulf nations have cut down production. The end result is a price hike that leaves the global economy reeling under its impact.

For Sri Lanka, the lack of refinery and storage facilities has been a longstanding concern. The development of the 99 tanks, built during World War II under British colonial rule, has been a focal point in ensuring the country’s energy security. Cabinet Spokesman and Health Minister Nalinda Jayatissa has emphasised that the Government has a clear and strategic vision for the development of Trincomalee’s energy infrastructure, a project initiated as far back as 2003.

Fourteen out of the 99-tank complex have been given to Indian Oil Corporation for use by Lanka IOC. Another 61 tanks are under a joint venture between the Ceylon Petroleum Corporation and Indian Oil Corporation, formed during the tenure of Gotabaya Rajapaksa. Earlier, Energy Minister Kumara Jayakodi said the Government was carrying out preliminary work in this regard.

Energy connectivity is, in fact, one of the pillars of the proposed Sri Lanka-India partnership. A tripartite agreement has been signed among India, Sri Lanka and the United Arab Emirates (UAE) for the laying of a multi-product pipeline between the two countries, with Trincomalee earmarked as a petroleum hub. Sri Lanka’s annual fuel requirement stands at 42.16 million barrels, while storage capacity is around 150,000 tonnes. Proponents of Sri Lanka-India connectivity argue that a pipeline enabling two-way fuel delivery would strengthen the country’s energy security. They point out that Sri Lanka’s annual requirement is only a tiny fraction of India’s consumption – equivalent to less than ten days of its needs.

This has been highlighted in the ‘Study Group Report on India-Sri Lanka Physical Connectivity’ by the Pathfinder Foundation, headed by former Sri Lanka’s High Commissioner to India, Milinda Moragoda.

It is time for the Government to move from rhetoric to action. The current rulers, when in Opposition, were vociferous critics of Indian involvement in the development of the Trincomalee oil tank farm. Now in office, they support the project. Setting aside politics, the merits of the project should be carefully considered.

Likewise, the Government made much fanfare about securing the single largest foreign direct investment (FDI) when it signed a memorandum of understanding with Chinese authorities for a refinery in the Hambantota district by Sinopec. The proposed investment marks one of the most significant FDIs in Sri Lanka’s recent history. It involves a US$ 3.7 billion oil refinery in Hambantota, envisioned as an export-oriented facility with a capacity of around 200,000 barrels per day. The project is expected to enhance Sri Lanka’s position along key global shipping routes while reducing its dependence on imported refined fuel. However, more than a year has passed since the MoU was signed, and the project has yet to get off the ground.

Both projects involving India and China are vital for Sri Lanka’s energy security. What is needed now is decisive government action to iron out any shortcomings.

At the same time, the Government should intensify its focus on developing the renewable energy sector. The world is increasingly reducing its dependence on fossil fuels, and the Middle East conflict will only heighten concerns about energy insecurity. Countries are likely to accelerate their shift towards renewable energy. Sri Lanka is well endowed with wind and solar resources – two key sources of renewable energy.

The Government must clear the bottlenecks that are throttling the development of the energy sector. This is not the time for mere talk, but for decisive action.