ECONOMYNEXT – Sri Lanka is set to start receiving fuel shipments from India under a US$500 million line of credit before the end of this month, the whole process has been accelerated due to the ongoing fuel shortage in the island nation, official sources said.
The fuel shortage in Sri Lanka led to an unprecedented power outage of more than 7 hours a day and long queues at petrol stations across the country as the country was unable to purchase fuel due to the currency crisis.
Sri Lanka originally expected to secure less than US$500 million worth of fuel under the line of credit in the first week of April.
“We will probably get Indian oil packages as early as this month because they speed up the process,” an energy ministry official told EconomyNext.
Government ministers have claimed that the power cuts can be ended from March 05, after the arrival of a 30,000 metric ton oil tanker.
However, Ceylon Electricity Board officials said power outages can be reduced but not eliminated even if all thermal power plants are running as electricity storage is depleted.
“We have now launched a tender to buy Indian fuel. The tender includes diesel, gasoline and aviation fuel. What we know is that they (the India) are speeding up the process now,” the Energy Ministry official said.
Indian Oil Corporation reportedly said in Indian media that it will supply 12-13 shipments of diesel, gasoline and jet fuel to Sri Lanka over the next 4-5 months.
An Indian official who is familiar with ongoing discussions between the two countries over the fuel line of credit confirmed the expedited process.
“Shipments will arrive before the first week of April,” he said. (Colombo/March 04, 2022)