Sri Lanka To Face Fuel Shortages By End Of Month, Signs Deal With India To Redevelop Oil Tank Farm

Sri Lanka to face fuel shortages by the end of the month soon after electricity board warns of powercuts signs a deal with India to jointly redevelop the strategic World War II-era oil tank farm.

Representational Image

New Delhi: The Energy Minister of Sri Lanka, Udaya Gammanpila, on Friday warned that by the third weak of January the country will run out of fuel. He urged the Central Bank to release foreign currency required for imports, reported PTI. 

The Minister's warning came right after, the Ceylon Electricity Board issued a statement, asking citizens to brace for power cuts in the days to come due to its inability to purchase fuel.

“There is this looming danger which I have informed the Cabinet no less than on 8 occasions. The Central Bank has to ensure Letters of Credit can be opened for cooking gas and fuel. We could substitute imported food with some local varieties, but for fuel, it is not possible,” Gammanpila said.

The Sri Lankan government on Tuesday had announced a USD 1.2 billion economic relief package amidst a severe foreign exchange crisis grappling the island nation. However, last week, the Central Bank of Sri Lanka announced that the country’s foreign exchange reserves had doubled in the span of just one month, and touched USD 3.1 billion.

According to sources, the forex reserve boost was buoyed by a 10 billion yuan (USD 1.6 billion) currency swap agreement signed with China on March 21 this year.

The Energy Minister’s comments come hours after the Sri Lankan government had signed an agreement with India to jointly redevelop the strategic World War II-era oil tank farm in the island nation’s eastern port district of Trincomalee, in a new milestone in bilateral economic and energy partnership.