Sri Lanka to exhaust $500 mn Indian fuel credit line by April-end

AgenciesUpdated: Friday, April 08, 2022, 10:50 AM IST
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ndia will ship the next stock of 40,000 tons of diesel on April 15 and is expected to deliver another similar consignment on April 18. /Sri Lanka flag |

The $500 million credit line provided by India for fuel will be exhausted after the delivery of another 120,000 tons of diesel and 35,000 tons of petrol to Sri Lanka in the remaining period of this month.

India will ship the next stock of 40,000 tons of diesel on April 15 and is expected to deliver another similar consignment on April 18. India will be also delivering the stock of petrol on April 22.

India is also expected to ship a similar quantity of diesel on April 23, Daily Mirror reported citing sources. There are negotiations going on currently to increase the credit facility. Or else, Sri Lanka can reuse it once payments are settled for the purchases already made.

Notably, India has offered a $500 million credit line for the purchase of fuel from the Indian Oil Company. Once India delivers these consignments, $468 million will be exhausted. Earlier, on Wednesday, India supplied over 270,000 MT of fuel to Sri Lanka so far to help ease the power crisis in the island country which is witnessing acute power cuts.

Moreover, one consignment each of 36,000 MT petrol and 40,000 MT diesel was delivered to the island nation in the last 24 hours. The consignment is a part of the US 500 million oil line of credit (LoC) extended by India to Sri Lanka.

"#Indian credit line for fuel at work!!! One consignment each of 36,000 MT petrol and 40,000 MT diesel was delivered to #SriLanka in the last 24 hours. Total supply of various types of fuel under Indian assistance now stands at more than 270,000 MT," tweeted India High Commission in Colombo.

A fuel line of credit of $500 million was signed in February and expected to deliver the fuel by May. Meanwhile, Ministry of External Affairs (MEA) spokesperson Arindam Bagchi on Thursday said that Sri Lanka is a neighbour and a close friend of India and India is closely watching the developments in the island nation.

He further said, "We stand ready to continue working with Sri Lanka for rapid post-COVID economic recovery. This is in line with our neighbourhood first policy and we have already conveyed to them on various occasions our readiness to extend whatever support we can and as has been demonstrated by our actions till now."

Sri Lanka is battling a severe economic crisis with food and fuel scarcity affecting a large number of the people in the island nation. The economy has been in a free-fall since the onset of the COVID-19 pandemic.

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

(With PTI inputs)

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