Colombo: Mr. Lanka The island nation has sought a $500 million credit line from India to pay for crude oil purchases amid a severe foreign exchange crisis.
The move comes days after the Energy Minister Uday Gamanpila warned that the current availability of fuel in the island nation could only be guaranteed until next January.
State-run Ceylon Petroleum Corporation (CPC) owes about $3.3 billion to two major state-run banks – the Bank of Ceylon and the People’s Bank. The state’s oil distributors import crude oil from the Middle East and refined products from other regions, including Singapore.
“We are currently engaged with the Indian High Commission here to get the facility ($500 credit line) under the India-Sri Lanka Economic Partnership arrangement,” CPC chairman Sumit Wijesinghe was quoted as saying by local news website newsfirst.lk.
He said that this facility would be used for procuring petrol and diesel requirements.
The report, quoting the finance secretary, said that the energy secretaries of both India and Lanka may soon sign an agreement for the loan. SR Attigale as saying.
The government has put on hold the increase in the expected retail prices of the fuel despite last week’s increase in cooking gas and other essential items.
Rising global oil prices have forced Lanka to spend more on oil imports this year. The country’s oil bill grew by 41.5 per cent to $2 billion in the first seven months of this year compared to last year.
Lanka is facing a severe foreign exchange crisis after the pandemic affected the country’s earnings from tourism and remittances, the Finance Minister said. Tulsi Rajapaksa Said last month.
The country’s GDP fell by a record 3.6 percent in 2020 and its foreign exchange reserves fell by more than half to just $2.8 billion in a year since July. This has led to the Sri Lankan rupee depreciating by 9 per cent against the dollar in the past one year, making imports more expensive.
The move comes days after the Energy Minister Uday Gamanpila warned that the current availability of fuel in the island nation could only be guaranteed until next January.
State-run Ceylon Petroleum Corporation (CPC) owes about $3.3 billion to two major state-run banks – the Bank of Ceylon and the People’s Bank. The state’s oil distributors import crude oil from the Middle East and refined products from other regions, including Singapore.
“We are currently engaged with the Indian High Commission here to get the facility ($500 credit line) under the India-Sri Lanka Economic Partnership arrangement,” CPC chairman Sumit Wijesinghe was quoted as saying by local news website newsfirst.lk.
He said that this facility would be used for procuring petrol and diesel requirements.
The report, quoting the finance secretary, said that the energy secretaries of both India and Lanka may soon sign an agreement for the loan. SR Attigale as saying.
The government has put on hold the increase in the expected retail prices of the fuel despite last week’s increase in cooking gas and other essential items.
Rising global oil prices have forced Lanka to spend more on oil imports this year. The country’s oil bill grew by 41.5 per cent to $2 billion in the first seven months of this year compared to last year.
Lanka is facing a severe foreign exchange crisis after the pandemic affected the country’s earnings from tourism and remittances, the Finance Minister said. Tulsi Rajapaksa Said last month.
The country’s GDP fell by a record 3.6 percent in 2020 and its foreign exchange reserves fell by more than half to just $2.8 billion in a year since July. This has led to the Sri Lankan rupee depreciating by 9 per cent against the dollar in the past one year, making imports more expensive.
.