Sri Lanka Seeks $500 Million Loan From India For Purchase Of Petroleum Products
Mumbai: Sri Lanka is seeking a $500-million loan from the Export-Import Bank of India (India Exim Bank) to purchase petroleum products amid a severe economic crisis. Sri Lanka on Tuesday raised petrol and diesel prices by a record 24.3% and 38.4%, respectively.
Sri Lanka is considering various options to facilitate measures to prevent the drying up of fuel pumps, as the country faces a severe foreign exchange crunch to pay for its imports. The country is grappling with unprecedented economic turmoil, the worst since independence from Britain in 1948.
It is facing a shortage of almost all essential commodities due to a paucity of dollars to pay for imports.
Energy Minister Kanchana Wijesekera said on Tuesday that the cabinet meeting held on Monday approved the proposal to take a loan from Indian Exim Bank to buy fuel.
It has been said in the cabinet note that the proposal to take a loan of $ 500 million from the Indian Exim Bank for the purchase of petroleum products was approved by the Minister of Energy and Energy in the current economic situation.
Wijesekara said Sri Lanka has already received $500 million from the Exim Bank of India and $200 million from the State Bank of India for oil purchases.
From June, Sri Lanka is estimated to need USD 530 million for fuel imports in the current foreign exchange crisis.
Troubled Sri Lanka on Tuesday hiked petrol prices by 24.3 per cent and diesel by 38.4 per cent, a record hike in fuel prices amid the country’s worst economic crisis due to lack of foreign exchange reserves.
On Monday, India said it has delivered around 40,000 metric tonnes of petrol to Sri Lanka, after supplying 40,000 metric tonnes of diesel under the Indian line of credit to help ease the acute fuel shortage.
India last month extended an additional $500 million loan to Sri Lanka to help the neighbouring country import fuel as it struggles to pay for imports following a sharp fall in its foreign exchange reserves in recent days. The devaluation of its currency and rising inflation.
The economic crisis has also led to a political crisis in Sri Lanka and calls for the resignation of President Gotabaya Rajapaksa.
The crisis has already forced the president’s older brother, Prime Minister Mahinda Rajapaksa, to resign on 9 May.
An inflation rate spiralling towards 40 per cent, shortages of food, fuel and medicines and rolling power blackouts have led to nationwide protests and a plunging currency, with the government short of the foreign currency reserves it needed to pay for imports.
Follow us on Twitter, and Instagram, and like us on Facebook for the latest updates and exciting stories.
