The $500-million credit line provided by India for fuel will be exhausted after the delivery of another 120,000 tonnes of diesel and 35,000 tonnes of petrol to Sri Lanka in the remaining period of this month.
India will ship the next stock of 40,000 tonnes of diesel on April 15 and is expected to deliver another similar consignment on April 18. It will also be delivering a stock of petrol on April 22.
India is also expected to ship a similar quantity of diesel on April 23, the 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 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 help ease the power crisis in the island country.
Moreover, one consignment each of 36,000 MT petrol and 40,000 MT diesel was delivered in the last 24 hours. The consignment is a part of the $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. The 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 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. The economy has been in a free-fall since the onset of the Covid-19 pandemic. The country 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.