India will provide an additional $500 million in financial aid to help the Srilanka island nation buy fuel, and that Bangladesh was willing to postpone $450 million in swap repayments to help Colombo. This is the second $500 million in gasoline credit that India has given to a Sri Lankan government grappling with the country’s greatest financial crisis in living memory.
- After a shipment of 120,000 tonnes of diesel and 40,000 tonnes of gasoline earlier this month, the first line of credit was exhausted.
- India has supplied approximately 400,000 tonnes of petroleum so far.
- After fuel stockpiles were depleted, massive protests erupted.
- AFP claimed that thousands of irate motorists torched tyres and blocked a major road leading into Colombo, citing police and local officials. The protests erupted after the state-run Ceylon Petroleum Corporation increased the price of 92 octane gasoline to LKR 338 per litre, an increase of LKR 84.
- The CPC raised its prices for the second time this month.
- The Lankan Indian oil giant raised its pricing for the fifth time in six months.
India’s Stand for Srilanka:
- India has given two credit lines totaling more than $2 billion to help with the purchase of food (rice has already been sent), medicines, and other necessities.
- India also requested the IMF, or International Monetary Fund, to offer financial support to Sri Lanka as soon as possible.
- On the sidelines of the IMF-World Bank spring conference in Washington, DC, finance minister Nirmala Sitharaman met with IMF chief Kristalina Georgieva.
- Sri Lanka had sought India’s assistance in securing foreign support for bridging funding as it started bailout talks with the IMF.
- Crisis-hit Sri Lanka defaulted on its external debt, which was estimated to be worth more than $51 billion.
- Foreign debt payments have been temporarily halted, according to officials, in order to prevent a hard default and conserve limited reserves for crucial imports.
- Sri Lanka is negotiating with the IMF for a rescue of at least $4 billion.
Important Takeaways for All Competitive Exams:
- Sri Lankan Foreign Minister: GL Peiris
- IMF chief: Kristalina Georgieva.
- Srilanka President: Gotabaya Rajapaks