Sri Lanka is in the midst of its biggest economic crisis since its 1948 independence from the United Kingdom. Food and gasoline supplies are scarce, and there is record inflation and protracted outages as a result of the crisis.
With the supply of 120,000 tonnes of diesel and 40,000 tonnes of petrol over the next two weeks, Sri Lanka is set to exhaust $500 million in fuel aid supplied by India to alleviate the island nation’s power problem. India plans to send three 40,000 tonne cargoes of diesel on April 15, 18, and 23, as well as a 40,000 tonne gasoline shipment on April 22. India delivered two more petroleum consignments to Sri Lanka on Wednesday, totaling 36,000 tonnes of gasoline and 40,000 tonnes of diesel.
Officials from both parties are negotiating an increase to the credit line amid fears that Sri Lanka would run out of fuel (again) by the end of the month. If the talks fail, Sri Lanka will only be able to use the credit line again once all previous purchases have been paid for.
So far, India has sent 270,000 tonnes of petroleum to Sri Lanka as part of its “neighbourhood first” policy, which is aimed at assisting the country in overcoming its worst economic crisis in decades. The country’s foreign currency reserves have plummeted, from $2.31 billion in February to $1.93 billion in March, leaving it unable to pay billions in foreign debts or meet basic needs like food and fuel, causing major protests.
India’s $500 million line of credit for petrol is in addition to the $2.5 billion it has set aside for the purchase of other necessities such as food and medicine.
