India has agreed to a request from Sri Lanka to give an immediate shipment of diesel, in addition to monthly fuel deliveries, under a $500 million line of credit to help the island nation cope with a severe shortfall caused by the country’s economic crisis.

People familiar with the situation stated on Thursday that the state-run Indian Oil Corporation is anticipated to deliver 40,000 tonnes of fuel to Sri Lanka soon. This will be in addition to the seven monthly shipments of gasoline, diesel, and aviation fuel that were completed in February under the line of credit for purchasing petroleum goods.

Despite global fuel price increases and interruptions, the Indian side welcomed Sri Lanka’s request for extra diesel deliveriesmarket due to the Ukraine conflict, the people cited above said on condition of anonymity. The request was made due to a sudden and acute diesel shortage in Sri Lanka in recent weeks, according to the people.

After taking into account significant local requirements, the Indian side is now trying to put together the consignment for Sri Lanka. According to the sources, there are also issues with arranging shipping for the fuel consignments.

An email inquiry to the oil ministry and Indian Oil Corporation went unanswered. Supply lines, notably for commodities and energy, have been interrupted, according to a commerce ministry official who did not want to be identified, as a result of the global geopolitical situation following Russia’s invasion of Ukraine on February 24.

“The government and the sector are working together to overcome particular challenges like shipping facility availability,” the person said.

According to the people cited above, concerns relating to global commodity supply disruptions caused by the Ukraine crisis and related difficulties are being handled on a case-by-case basis with the assistance of relevant agencies and ministries.

On February 2, the Export-Import Bank of India and the Sri Lankan government signed a deal for a $500 million line of credit to purchase petroleum products from India. In response to Colombo’s pressing needs, India provided support for petroleum imports, which was discussed in a virtual conference between India’s external affairs minister S Jaishankar and Sri Lanka’s finance minister Basil Rajapaksa in January 15

To help Sri Lanka, India has extended a $400 million Saarc currency exchange facility and deferred payment of $515.2 million to the Asian Clearing Union (ACU) by two months.

Sri Lanka received a $1 billion short-term concessional loan from India on March 17 to help it deal with one of its biggest economic crises in decades. The State Bank of India’s line of credit will be utilized to import food, medicines, and other necessities from India.

Rajapaksa signed the deal for this line of credit during his second visit to India since December. Prime Minister Narendra Modi declared during a meeting with Rajapaksa that India “will continue to stand with the friendly people of Sri Lanka.”

By 12news World

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