Friday, September 30, 2022

Sri Lanka to hold talks with Indian Oil to tackle country’s oil crisis

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Sri Lanka will undertake discussions with the Indian Oil Corporation on Tuesday as part of a desperate effort to alleviate the island nation’s current fuel and energy shortages, according to Power Minister Gamini Lokuge. The negotiations with the Indian Oil Corporation’s local business, according to Lokuge, would be held to find a solution to the oil shortage.

Since 2002, the Lanka IOC, a Sri Lankan affiliate of India’s largest oil company, Indian Oil Corporation (IOC), has been operating in Sri Lanka. In the matter, the country’s electricity minister stated he has ordered his officials to begin negotiations with the LIOC tomorrow (Tuesday), and he will participate if required. He further stated that the uninterrupted supply of energy could be guaranteed till January 22. He had previously stated that supply might be guaranteed until January 18.

Udaya Gammanpila, the energy minister, said there was no sense in negotiating continuous supply of diesel and furnace oil, which are needed to generate electricity, with the power ministry. Gammanpila said that they must come up with their own funds to pay for the materials and place their orders well in advance. Srilankan Airlines, the country’s national airline, he said, had obtained funds on its own to pay for fuel supply.

Sri Lanka has been experiencing a serious foreign exchange crisis as its reserves continue to drop. Due to a scarcity of money to pay for imports, the country is experiencing a shortage of practically all basics. Additionally, power cuts are imposed during peak hours due to a lack of fuel to drive turbines by the state power agency. Because the electrical board has substantial overdue obligations, the state fuel organisation has halted oil deliveries. The lone refinery in the country was recently shut down due to a lack of funds to pay for crude imports in dollars.

The Indian government announced a billion-dollar aid package for Sri Lanka earlier this week, in addition to other balance-of-payments assistance. The billion-dollar loan credit facility will be utilised to prevent a food catastrophe while allowing products and medications to be imported. There will also be USD 500 million set aside for petroleum imports from India.

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