Sri Lanka which is going through its worst foreign exchange crisis has asked India for a $500 million credit line from India to pay for its crude oil purchase.
The country’s state-owned Ceylon Petroleum Corporation (CPC) owes about $3.3 billion to its government banks, namely: People’s Bank and Bank of Ceylon.
Sri Lanka’s energy minister Udaya Gammanpila has given his nation a stark reminder that the current availability of fuel in the island nation can be guaranteed only until January 2022.
“We are currently engaged with the Indian High Commission here to obtain the facility (USD 500 million credit line) under the India-Sri Lanka economic partnership arrangement,” Sumith Wijesinghe, Chairman of the CPC, was quoted by the Financial Express.
If the negotiations are complete, the monies will be utilised for purchasing their requirements for petrol and diesel and Finance Secretary S R Attygalle informed that the energy secretaries of India and Sri Lanka are slated to sign an agreement for the loan soon.
To ensure there is no panic, the Lankan government has put a stop to the expected retail price hike of fuel though they increased the prices of cooking gas and other essentials last week.
It must be noted that Sri Lanka asked India for a line of credit and not China because of the latter’s predatory financial practice with the island nation in massive debt.
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