Wednesday, May 29, 2024

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India launches the initiative of fuel supply to Sri Lanka on easy terms

Sri Lanka received 40,000 metric tons of fuel purchased by the Ceylon Petroleum Corporation from the Indian Oil Corporation kick starting the initiative of tackling fuel crisis with Indian assistance 

The IOC had submitted a quotation for fuel supplies based on a request by the Energy Ministry while the IOC has also granted a 60-day period to make the payment.

Sri Lanka has decided to purchase petrol and diesel, 40,000 metric tonnes each, from the Indian Oil Corporation, according to a Cabinet decision as part of the government’s bid to tide over the current fuel and energy crisis faced by the island nation.

The Lanka IOC, the Sri Lankan subsidiary of India’s oil major Indian Oil Corporation (IOC), has been in operation in Sri Lanka since 2002.

According to the Cabinet statement, the Ministry of Energy has discussed with the IOC to procure 40,000 metric tonnes of diesel and 40,000 metric tonnes of petrol.
“Accordingly, the Indian Oil Corporation has agreed to supply a shipment of 40,000 metric tonnes of diesel,”Energy Ministry said.  

Sri Lanka in the recent weeks has been considering different options to facilitate measures to prevent fuel pumps from going dry as the island nation was faced with a severe foreign exchange crisis to pay for its imports.
Energy Minister Udaya Gammanpila had predicted fuel shortages in the country due to the inability to pay for imports.

When the crisis loomed, the government approached the IOC’s local operation LIOC to import fuel for the government.

The LIOC had earlier declined the request as they themselves were affected by the shortage of foreign currency to import.

Sri Lanka is currently facing a severe foreign exchange crisis with falling reserves.
The country is grappling with a shortage of almost all essentials due to the lack of dollars to pay for the imports.

Additionally, power cuts are to be imposed at peak hours once again as the state power entity is unable to obtain fuel to run turbines.
The state fuel entity CPC  has stopped oil supplies as the electricity board has large unpaid bills.

The only refinery was recently shut as it was unable to pay dollars for crude imports.
 Sri Lanka is in the process of finalising the Indian government’s US$ 1 billion assistance package in addition to other balance of payment support.
The billion-dollar line of credit f is to be used to avert a food crisis while allowing for the import of items and medicines, official sources said. Additionally, there will be US$ 500 million for importing fuel from India.

The Minister of Energy Udaya Gammanpila, speaking at the event organised to accept the stock of fuel stated that while Sri Lanka is undergoing a large foreign exchange crisis, therefore has been experiencing difficulties in financing oil imports.  
However, the Minister added that Sri Lanka could not wait until the US$ 500Mn credit line was finalized, and the country was in need of fuel urgently due to the newly created demand which came from the power sector.  

The Indian High Commissioner of Sri Lanka, Gopal Bagley also speaking at the event said that this as two countries have shared history and also underwent difficulties due to the recent COVID-19 pandemic, India is committed to stand by Sri Lanka at this time of crisis

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