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HomeCanadian NewsSri Lanka to Enlist Overseas Firms to Ease Gasoline Shortages

Sri Lanka to Enlist Overseas Firms to Ease Gasoline Shortages


Sri Lanka plans to permit overseas corporations to distribute gasoline in a bid to ease crippling shortages which have paralyzed most financial exercise because the island nation grapples with a sovereign debt disaster.

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(Bloomberg) — Sri Lanka plans to permit overseas corporations to distribute gasoline in a bid to ease crippling shortages which have paralyzed most financial exercise because the island nation grapples with a sovereign debt disaster.

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The federal government is making ready a cupboard paper that may enable for extra gasoline distributors, and is aiming for 4 new gamers — with overseas corporations permitted — to function state-run Ceylon Petroleum Corp’s filling stations, Power Minister Kanchana Wijesekera stated in a press convention. At present solely CPC and Indian Oil Corp Ltd’s Sri Lanka unit are permitted to distribute gasoline. 

The brand new distributors can be requested to import oil on credit score, Wijesekera stated. 

The island nation is in talks with the Worldwide Financial Fund in addition to bilateral collectors akin to India and China for recent funds to pay for imports after it defaulted on its greenback bonds earlier this yr and noticed overseas reserves dwindle. Sri Lanka wants $6 billion within the coming months to prop up its reserves, pay for ballooning import payments and stabilize its foreign money, which has fallen 43% in opposition to the greenback this yr.

The nation’s credit standing downgrade and current arrears raised threat for suppliers and contributed to the failure to get overseas lenders together with Commonplace Chartered and a few Indian banks to verify the letter of credit score from state-run Folks’s Financial institution for the final gasoline cargo, Wijesekara stated.

CPC may even facilitate imports of jet gasoline by state-run Sri Lankan Airways, which is itself up on the market as the federal government seeks to lift funds. The nation has to cut back month-to-month gasoline consumption to $350 million from $650 million at the moment, the minister stated.

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