As credit lines to Sri Lanka were exhausted, India is seeking payment in advance for supply of fuel to the island nation, citing sources, Bloomberg reported on Wednesday.
Quoting sources, the news agency reported that the Indian government officials said that New Delhi stopped supplying gasoline and diesel on credit after Sri Lanka ran out of dollars to purchase fuels amid its worst economic crisis. That’s holding up some fuel shipments pending cash payment by Sri Lanka’s Ceylon Petroleum Corp., according to the report.
Ceylon Petroleum’s cargo schedule tweeted by Sri Lankan Energy Minister Kanchana Wijesekera showed at least four shipments of gasoline and diesel from state-run refiner Indian Oil Corp. are pending confirmation of advance payment.
India has already extended over $3.5 billion of support to Sri Lanka in the past few months for food, medicines, and fuel.
Sri Lanka, which has depleted its foreign exchange (Forex) reserves, was hoping for a fresh approval from India of a $500 million credit line for fuel purchases. Colombo has sent envoys to Qatar to secure fresh supplies and is also seeking oil from Russia.
Between March and June, Indian Oil has delivered about 450,000 tonnes of gasoline and diesel to Ceylon Petroleum, a spokesperson for the company said.
The fuel crisis has led to a shutdown of public schools and offices in Sri Lanka until July 10 to conserve fuel, even as thousands of vehicles continue to queue for miles waiting for filling stations to be replenished.
The bankrupt nation is offering a guaranteed fuel quota to companies that can pay dollars to Ceylon Petroleum in advance to ease the crippling shortages. It also plans to allow foreign firms to distribute fuel to help ease the crisis that has paralyzed most economic activity.