Sri Lanka to request $500 million fuel loan from India

Reports have emerged that the Sri Lankan government is in discussions with the Indian government for obtaining a $500 million credit line to cover its own debts in the crude oil sector. Lanka is facing a severe foreign exchange crisis after the pandemic hit the nation's earnings from tourism and remittances, Finance Minister Basil Rajapaksa had said last month. The depreciating value of Lankan rupee against the dollar also drove up import prices while a decrease of 3.6% in GDP last year compounded tbe country's economic woes.

Chairman of the Ceylon Petroleum Corporation Attorney-at-Law Sumith Wijesinghe speaking to News 1st in Lanka said that the loan would be secured with the intervention of the Indian High Commission in Sri Lanka.

The move came few days after energy minister Udaya Gammanpila warned that the current availability of fuel in the country can be guaranteed only till next January. Sri Lanka's Ceylon Petroleum Corporation owes approximately $3.3 billion to the main government banks, after importing crude oil products from the Middle East as well as refined products from other areas like Singapore.