India has offered a US$ 500 million credit line that should provide temporary relief.
Sri Lanka is facing a serious energy crisis as its state-owned petroleum company has run out of cash to buy oil.
According to Udaya Gammanpila, Minister of Energy, the state-run Ceylon Petroleum Corporation (CPC) which is already operating under huge losses can no longer afford to import oil from abroad. This has led to a massive shortage leading to long queues at fuel bunks.
The CPC suffered losses of up to 42% on the sale of diesel, amounting to US$ 415 million last year alone. It has also been reported that several thermal power stations in the island nation had to be shut down last week due to the severe fuel shortage.
The minister stated that earlier, the government was short of dollars to import oil and now it doesn’t have the rupees to buy the dollars. The US$ 500 million credit line offered by the Indian government last month should provide temporary relief.
Keyword: Sri Lanka runs out of money to buy petrol