Lagatar24 Desk
New Delhi, March 25: India has agreed to a request from Sri Lanka to give an immediate shipment of diesel, in addition to monthly fuel deliveries, under a $500 million line of credit to help the island nation cope with a severe shortfall caused by the country’s economic crisis.
People familiar with the situation stated on that the state-run Indian Oil Corporation is anticipated to deliver 40,000 tonnes of fuel to Sri Lanka soon. This will be in addition to the seven monthly shipments of gasoline, diesel, and aviation fuel that were completed in February under the line of credit for purchasing petroleum goods.
Despite the worldwide market disruptions and increases in gasoline costs caused by the Ukraine conflict, the Indian side accepted Sri Lanka’s request for increased diesel supply. The request was made due to a sudden and acute diesel shortage in Sri Lanka in recent weeks, according to the people.
After taking into account significant local requirements, the Indian side is now trying to put together the consignment for Sri Lanka. According to the sources, there are also issues with arranging shipping for the fuel consignments.
Supply lines, notably for commodities and energy, have been interrupted due to the Ukraine Russia war, according to a commerce ministry official.
According to the people cited above, concerns relating to global commodity supply disruptions caused by the Ukraine crisis and related difficulties are being handled on a case-by-case basis with the assistance of relevant agencies and ministries.
On February 2, the Export-Import Bank of India and the Sri Lankan government signed a deal for a $500 million line of credit to purchase petroleum products from India. In response to Colombo’s pressing needs, India extended support for petroleum imports, which was discussed in a virtual conference between India’s external affairs minister S Jaishankar and Sri Lanka’s finance minister Basil Rajapaksa on January 15.
To help Sri Lanka, India has extended a $400 million Saarc currency exchange facility and deferred payment of $515.2 million to the Asian Clearing Union (ACU) by two months.
