The Indian High Commission in Colombo said the Government of India has not committed so far to a further credit line for fuel.
There was speculation that negotiations may have been on the cards around the second week in June for Sri Lanka to ask India for another credit line of USD 500 mn for fuel. A controversy over an energy deal with Adani Green Energy Limited may have scuppered the talks.
Weeks later Sri Lanka’s High Commissioner in India Milinda Moragoda met India’s Minister for Petroleum and Natural Gas Hardeep Singh Puri to talk about Sri Lanka’s energy needs as an ‘urgent matter’. The meeting took place after four senior Indian officials led by Foreign Secretary Vinay Kwatra flew to Sri Lanka for what was literally a flying visit to meet with President Gotabaya Rajapaksa, Prime Minister Ranil Wickremesinghe and Sri Lankan diplomats.
Sri Lanka exhausted a credit line of USD 500 mn for fuel from India with the arrival of the last shipment of 40, 000 MT of diesel on 16th June. There have been no fuel shipments that have come to Sri Lanka since.
The Lanka Indian Oil Corporation, a subsidiary of state-owned Indian Oil Corporation and the only private sector auto fuel retailer in the country, has been distributing fuel in the interim to try and ease the acute fuel shortage which has left the country tottering on the brink of complete collapse. LIOC has a 10 -15 per cent share in Sri Lanka’s fuel market and this could increase if Sri Lanka’s state- run Ceylon Petroleum Corporation divests some of its fuel networks to LIOC. The Government of Sri Lanka has said it wants to allow foreign companies from oil-producing countries to distribute fuel in the country to overcome the acute fuel shortage it is currently hamstrung by. The GoSL statement followed the visit of the Indian delegation to the country.
On 3rd of July, LIOC’s Managing Director Manoj Gupta tweeted that it is absolutely committed to release maximum quantities of gasoline in the prevailing situation. ‘Our Trinco terminal is operating even on Sunday and we are grateful to the CPSTL Chairman Maj. Gen Zoysa for sending additional bowsers from Colombo. Immense peace to be releasing 1 mn litres today’.
At the beginning of this year, Sri Lanka and India signed an agreement to jointly develop 61 of the 99 tanks in the Trincomalee Oil Tank Farm with the CPC retaining a controlling share with a 51 per cent stake.
Meanwhile on 2nd July Minister for Investment Promotion, Dhammika Perera handed over five-year visas to Indian business leaders. The LIOC was among those to whom the newly appointed minister gave a visa to.
The High Commission said it was not sure how many visas will be given saying it is a matter for the GoSL.
India has given Sri Lanka close to USD four billion in food, fuel, fertiliser and medicine.
