Sri Lanka to exhaust India’s $500m fuel line of credit by end of April

The $500 million line of credit provided by India for fuel will run out after an additional 120,000 tonnes of diesel and 35,000 tonnes of gasoline were delivered to Sri Lanka during the remaining period of this month.

India will ship the next stockpile of 40,000 tonnes of diesel on April 15 and is expected to deliver another similar shipment on April 18. India will also deliver the gasoline stockpile on April 22.

India is also expected to ship a similar amount of diesel on April 23, the Daily Mirror reported citing sources.

Negotiations are currently underway to increase the credit facility. Or, Sri Lanka can reuse it once payments have been settled for purchases already made.

India has notably offered a line of credit of 500 million dollars for the purchase of fuel from the Indian Oil Company. Once India delivers these shipments, $468 million will be exhausted.

Earlier on Wednesday, India has provided more than 270,000 tonnes of fuel to Sri Lanka so far to help ease the power crisis in the island country which is facing severe power cuts.

Additionally, a shipment of 36,000 tons of gasoline and 40,000 tons of diesel has been delivered to the island nation in the past 24 hours. The shipment is part of India’s US$500 million Line of Credit (LoC) extended by India to Sri Lanka.

“#Indian Fuel Line of Credit at work!!! A shipment of 36,000 MT of gasoline and 40,000 MT of diesel has been delivered to #SriLanka in the last 24 hours. The total supply of various types of fuel under Indian assistance now stands at over 270,000 MT,” the High Commission of India in Colombo tweeted.

A $500 million fuel line of credit was signed in February and is expected to deliver fuel by May.

Meanwhile, Ministry of External Affairs (MEA) Spokesperson Arindam Bagchi said on Thursday that Sri Lanka is a close neighbor and friend of India and India is closely monitoring developments in the island nation.

He further said, “We are ready to continue working with Sri Lanka for a rapid economic recovery from COVID. This is in line with our neighborhood first policy and we have already told them on several occasions willingness to provide whatever support we can and as has been demonstrated by our actions thus far.”

Sri Lanka is in the grip of a severe economic crisis, with shortages of food and fuel affecting many of the island nation’s residents. The economy has been in free fall since the start of the COVID-19 pandemic.

The island nation is also facing a shortage of foreign exchange, which has affected its ability to import food and fuel, leading to power cuts in the country. The shortage of essential goods has forced Sri Lanka to seek help from friendly countries.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor

Comments are closed.