Energy disaster: Sri Lanka awaits Indian nod for brand spanking new credit score line

Sri Lanka is awaiting official affirmation from India on a brand new credit score line that might enable the cash-strapped nation to have provides of petrol and diesel for the following 4 months, Energy Minister Kanchana Wijesekara mentioned on Friday.

Sri Lanka is presently dealing with its worst financial disaster since independence from Britain in 1948.

The financial disaster has prompted an acute scarcity of important objects like meals, medication, cooking fuel and gas throughout the island nation.

The state gas entity Ceylon Petroleum Corporation (CPC) mentioned the ultimate cargo of diesel beneath the prevailing Indian Line of Credit of $700 million for gas arrived on Thursday.

“We did receive unofficial communication on a new credit line for fuel three to four weeks ago, so far no official confirmation of it being made available,” Wijesekara mentioned.

#SriLanka hiked petrol costs by 20%-24% on Tuesday and likewise elevated diesel costs by 35%-38%. “Work from home will be encouraged to minimize the use of fuel and to manage the energy crisis,” Power and Energy Minister Kanchana Wijesekera mentioned pic.twitter.com/i0vJBDmEyJ

— DD News (@DDNewsreside) May 24, 2022

He mentioned the anticipated $500 million line of credit score facility from India would allow the nation to have provides of petrol and diesel for the following 4 months.

The authorities was additionally engaged on making preparations to buy crude oil although it’s a extra expensive operation.

The refilling stations are experiencing serpentine queues with the federal government chopping down on points to handle the disaster.

The minister mentioned solely 3,000 MT of diesel is being issued to fulfill the each day demand of 5,400 MT. Only 2,600 MT of petrol is being issued each day when the demand is for 3,400 MT.

Wijesekara mentioned the gas suppliers are now not giving Sri Lanka credit score and demand upfront money funds.

The present shortages have been made worse by the federal government’s incapacity to get the state-owned Bank of Ceylon to open Letters of Credit for gas imports.

As a measure to deal with the gas shortages and the resultant transport difficulties the state sector staff are allowed to deal with Fridays as holidays ranging from June 17, the general public administration ministry mentioned in a round.

This will likely be in pressure for the following three months. A particular vacation was granted on Friday for all faculties as a consequence of transport difficulties.

The privately-owned bus operators mentioned they have been doing solely 20 per cent of the providers as a consequence of gas shortage.

The state staff are inspired to bask in agricultural exercise to develop meals in the course of the Friday vacation as a measure to mitigate the perceived meals disaster forthcoming, the ministry mentioned.

On Tuesday, Prime Minister Ranil Wickremesinghe mentioned {that a} new Credit Line offered by India will assist the cash-strapped island nation’s gas buy for one more 4 months from July at the same time as an LPG cargo of three,500 MT reached Sri Lanka.

The fuel from this cargo will likely be delivered to premises that receive shares in bulk like hospitals, accommodations, and crematoriums.

The nation is experiencing lengthy queues for refuelling at pumping stations as the federal government finds it troublesome to finance gas imports to retain a reserve ample for no less than three months.

A transfer to ration gas is to be carried out from subsequent month because the Forex disaster will get worsened.

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The almost bankrupt nation, with an acute overseas forex disaster that resulted in overseas debt default, introduced in April that it’s suspending almost $7 billion overseas debt reimbursement due for this 12 months out of about $25 billion due by means of 2026. Sri Lanka’s complete overseas debt stands at $51 billion.