Conflicts & War

Sri Lankan oil retailer seeks another $500 credit line from India

Colombo, Apr 11 (EFE).- Sri Lanka is in discussion with India to secure another $500 million fuel credit line to help ease the foreign exchange pressure once the first$500 million credit line extended by New Delhi recently runs out, the chairman of state-run retailer Ceylon Petroleum Corporation (CPC) said on Monday.

“We are in discussion for another $500 million,” Sumith Wijesinghe told a media briefing.

“With the April order, we would have used between $375-$400 million of the current Indian credit,” he added.

The official said that the retailer was facing a severe fuel shortage because of lack of US dollars to buy fuel, leading to delays in petrol and diesel shipments in the past three months.

“Currently two ships are waiting for the payments,” Wijesignhe said.

He added that the depreciation of the rupee, increased global fuel prices, and the CPC’s inability to increase the domestic prices have aggravated the crisis.

The debt servicing amount of the state-run firm has jumped by at least 360 billion Sri Lankan rupees ($1.1 billion) due to the steep depreciation of the currency, while the monthly fuel import has also risen to $700 million in April from February’s $450 million, the CPC chairman said. .

The rupee has depreciated around 65 percent so far since the central bank allowed flexibility in the exchange rate on March 7.

The revelation comes as protests have intensified against President Gotabaya Rajapaksa’s government.

On Sunday, thousands of demonstrators camped out in he capital demanding Rajapaksa’s resignation, although the president has refused to step down despite the desertion of several ministers and lawmakers.

Protesters gathered in Colombo’s Galle Face Green park and outside the offices of the Rajapaksa family, which has several members in the government, expressing their outrage at the shortage of food, fuel, medicine and power cuts that have extended to 13 hours a day.

The rallies, of which there have been several over the past few weeks, are rare displays of discontent against the Rajapaksa family who were once seen as national heroes by many Sri Lankans.

The president’s older brother and incumbent premier was the head of state from 2004 to 2015 when the country’s forces defeated the Tigers of Tamil separatist guerrillas after a 26-year war.

A serious economic crisis in the indebted country, however, has undermined the popularity of the Rajapaksa clan.

Security forces have increases checkposts and deployment near the official residence of the president.

Sri Lanka is facing an unprecedented economic crisis triggered by the country’s huge foreign debt, economic recession during the pandemic and a drastic drop in tourism activity.

The situation was aggravated by an excess of money printing and the consequent depreciation of the national currency, promoted by the government for public spending. EFE


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