Categories: Economy

India to give additional $500 million Fuel Aid to Sri Lanka

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.

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Key Points:

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.