<p>Sri Lanka has sought a $500 million credit line from India to pay for its crude oil purchases amid a severe foreign exchange crisis in the island nation.</p>.<p>The move came few days after energy minister Udaya Gammanpila warned that the current availability of fuel in the island nation can be guaranteed only till next January.</p>.<p>The state-run Ceylon Petroleum Corporation (CPC) owes nearly $3.3 billion to the two main government banks -- Bank of Ceylon and People’s Bank. The state oil distributors imports crude from the Middle East and refined products from other areas, including Singapore.</p>.<p>“We are currently engaged with the Indian High Commission here to obtain the facility ($500 credit line) under the India-Sri Lanka economic partnership arrangement," CPC Chairman Sumith Wijesinghe was quoted as saying by local news website <em>newsfirst.lk</em>.</p>.<p>He said the facility would be utilised for purchasing petrol and diesel requirements.</p>.<p>The energy secretaries of both India and Lanka are expected to sign an agreement for the loan soon, the report quoted Finance Secretary S R Attygalle as saying.</p>.<p>The government has put on hold the expected retail price hike of fuel despite the last week's increase in cooking gas and other essentials.</p>.<p>The price hike in the global oil prices has forced Lanka to spend more on oil imports this year. The country's oil bill has jumped 41.5 per cent to $2 billion in the first seven months of this year, compared to last year.</p>.<p>Lanka is facing a severe foreign exchange crisis after the pandemic hit the nation's earnings from tourism and remittances, Finance Minister Basil Rajapaksa had said last month.</p>.<p>The country's GDP contracted by a record 3.6 per cent in 2020 and its foreign exchange reserves plunged by over a half in one year through July to just $2.8 billion. This has led to a 9 per cent depreciation of the Sri Lankan rupee against the dollar over the past year, making imports more expensive.</p>
<p>Sri Lanka has sought a $500 million credit line from India to pay for its crude oil purchases amid a severe foreign exchange crisis in the island nation.</p>.<p>The move came few days after energy minister Udaya Gammanpila warned that the current availability of fuel in the island nation can be guaranteed only till next January.</p>.<p>The state-run Ceylon Petroleum Corporation (CPC) owes nearly $3.3 billion to the two main government banks -- Bank of Ceylon and People’s Bank. The state oil distributors imports crude from the Middle East and refined products from other areas, including Singapore.</p>.<p>“We are currently engaged with the Indian High Commission here to obtain the facility ($500 credit line) under the India-Sri Lanka economic partnership arrangement," CPC Chairman Sumith Wijesinghe was quoted as saying by local news website <em>newsfirst.lk</em>.</p>.<p>He said the facility would be utilised for purchasing petrol and diesel requirements.</p>.<p>The energy secretaries of both India and Lanka are expected to sign an agreement for the loan soon, the report quoted Finance Secretary S R Attygalle as saying.</p>.<p>The government has put on hold the expected retail price hike of fuel despite the last week's increase in cooking gas and other essentials.</p>.<p>The price hike in the global oil prices has forced Lanka to spend more on oil imports this year. The country's oil bill has jumped 41.5 per cent to $2 billion in the first seven months of this year, compared to last year.</p>.<p>Lanka is facing a severe foreign exchange crisis after the pandemic hit the nation's earnings from tourism and remittances, Finance Minister Basil Rajapaksa had said last month.</p>.<p>The country's GDP contracted by a record 3.6 per cent in 2020 and its foreign exchange reserves plunged by over a half in one year through July to just $2.8 billion. This has led to a 9 per cent depreciation of the Sri Lankan rupee against the dollar over the past year, making imports more expensive.</p>