USD 500 mn credit line to procure petroleum products: Govt. wants India to double facility

‘Protests will ruin efforts to attract tourists’

By Shamindra Ferdinando

Sri Lanka is trying to have the USD 500 mn Indian Credit Line for fuel increased to USD 1 bn. Janaka Ratnayaka, Chairman of the five-member Public Utilities Commission of Sri Lanka (PUCSL) yesterday told The Island that Sri Lanka was seeking to have the Indian credit line doubled in line with overall efforts to tackle the worsening crises.

Emphasising the importance of doubling the Indian credit line, Ratnayake revealed that another combination of 200 MT of fuel would be delivered within a short period, also under USD 500 million credit line.

Declaring that funds had been made available for what he called anchored diesel shipment, Ratnayake said that sufficient stocks were now available to provide uninterrupted electricity supply for Sinhala and Tamil New Year on 13, 14 and Good Friday (April 15) as well.

Since the finalisation of the USD 500 mn credit line on Feb 02, 2022, for the purchase of petroleum products, India has delivered four shipments on 16, 20, and 23 March, and 02 April.

Eldos Mathew Punnoose, Head – Press, Information and Development Cooperation – since the operation began, 200,000 mt of fuel had been delivered, including a consignment of 40,000 MT by Indian Oil Corporation, outside the line of credit facility, in February 2022.

Treasury Secretary S.R. Attygalle, who signed for the USD 500 mn credit line on behalf of Sri Lanka, recently resigned after Basil Rajapaksa had lost the finance portfolio. Sri Lanka reached agreement with the Export and Import Bank of India in this regard.

Punnoose said in addition to the USD 500 mn credit line in response to a separate and urgent request from Sri Lanka, New Delhi had swiftly finalised a credit facility of USD 1 billion for the supply of essential items, including food and medicines. The first shipments of rice, under this facility, would be here soon, the official said.

Earlier in January this year, India provided financial assistance to Sri Lanka that included a credit swap of US$ 400 million and deferment of an Asian Clearing Union payment of over USD 515 million. In cumulative terms, Indian support to the people of Sri Lanka, in the first quarter of 2022, is in excess of US$ 2.5 billion, the Indian spokesperson here said.

Referring to travel advisories issued by several countries, PUCSL Chairman Ratnayake emphasised that large scale protests would have a catastrophic impact on efforts to attract tourists. Pointing out those violent incidents outside President Gotabaya Rajapaksa’s private residence at Pangiriwatte Road, Mirihana, on March 31, and continuing countrywide protests, including the ongoing campaign opposite the Presidential Secretariat, would undermine efforts to stabilise the situation.

Ratnayake said that the delay on the part of all those concerned at every level to take tangible measures to address issues at hand could increase pressure on the national economy. Responding to queries, Ratnayake said that early stabilisation of the national economy couldn’t be achieved if protests undermined political stability.