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Sri Lanka seeks USD 500-million loan from India for fuel purchases amid forex crisis

The Sri Lankan authorities on Saturday mentioned it’s persevering with efforts to safe a USD 500 million mortgage from India to make sure gas provides amid a extreme overseas trade disaster within the island nation.

“The proposal has been despatched to the Treasury for approval and can be submitted to the Cupboard thereafter,” mentioned Vitality Minister Udaya Gammanpila.

He mentioned the Cupboard had already sanctioned USD 3.6-billion mortgage from Oman for gas purchases.

Gammanpila indicated that steady gas provides can solely be assured until January subsequent 12 months because the island was going through a overseas trade disaster and better world costs.

Lengthy queues have been seen at gas pumps since Thursday resulting from hypothesis that retail costs can be hiked by the state gas company.

Lanka IOC (LIOC), the subsidiary of Indian Oil Company in Sri Lanka, had hiked the retail costs of each petrol and diesel by Rs 5 per litre. The brand new costs have been efficient from Thursday midnight within the wake of the rising world oil costs.

State-run Ceylon Petroleum Company has requested the federal government to permit a worth hike in view of its losses.

Gammanpila dominated out a worth revision in the interim. He additionally blamed the opposition for spreading rumours of an impending gas scarcity within the nation.

The value hike within the world oil costs has pressured Sri Lanka to spend extra on oil imports this 12 months. The nation’s oil invoice has jumped 41.5 per cent to USD 2 billion within the first seven months of this 12 months in comparison with final 12 months.

Sri Lanka is going through a extreme overseas trade disaster after the pandemic hit the nation’s earnings from tourism and remittances, Finance Minister Basil Rajapaksa had mentioned final month.

The nation’s gross home product contracted by a document 3.6 per cent in 2020 and its overseas trade reserves plunged by half in a single 12 months to simply USD 2.8 billion in July.

This has led to a 9 per cent depreciation of the Sri Lankan rupee in opposition to the greenback over the past 12 months making imports dearer.

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