Colombo: Sri Lanka has been looking for a $ 500 million credit line from India to pay for crude oil in the midst of a severe foreign exchange crisis in the island country.
The move came a few days after Energy Minister Udaya Gammanpila warned that the availability of current fuel in the island country can be guaranteed only until next January.
Ceylon Petroleum Corporation (CPC) managed by the government reached nearly $ 3.3 billion to two main government banks – Bank Ceylon and the People’s Bank.
The state oil distributor imports crude oil from the Middle East and processed products from other regions, including Singapore.
“We are currently engaged to the Indian High Commission here to get the $ 500 credit line below the Indian-Sri Lankan economic partnership arrangement,” Chairman Sumith Wijesinghe CPC was quoted as saying by the Newsfirst.LK local news website.
He said the facilities would be used to buy gasoline and diesel requirements.
Energy Secretary both India and Lanka are expected to sign an agreement for loans immediately, the report cites the Finance Secretary of SR AttyGalle.
The government has resist retail prices expected.
Climbing fuel even though there is an increase in cooking gas and other essence.
Price increases at global oil prices have forced Lanka to spend more on oil imports this year.
The state oil bill has surged 41.5 percent to $ 2 billion in the first.
Seven months this year, compared to last year.
Lanka faced a severe foreign exchange crisis after a pandemic regarding the income of the nation from tourism and money transfer, finance minis Ter Basil Rajapaksa said last month.
The country’s GDP was contracted by a record of 3.6 percent by 2020 and its foreign exchange reserves fell more than half in one year to July to only $ 2.8 billion.
This has caused a 9 percent depreciation of the Sri Lankan rupee against the dollar for the past year, making imports more expensive.