Economic crisis in Sri Lanka: India sends another shipment of 40,000 tons of diesel to crisis-hit Sri Lanka

Posted On: May 31, 2022

India on Tuesday said it had made another shipment of 40,000 tonnes of diesel to Sri Lanka to help ease acute fuel shortages in the debt-ridden island nation grappling with its worst economic crisis. India last month gave Sri Lanka an additional $500 million credit line to help the neighboring country import fuel as it struggled to pay for imports after its foreign exchange reserves plummeted recently, prompting a devaluation of its currency and rising inflation .

India shipped around 40,000 tons of gasoline to Sri Lanka on May 23.

“Powering #SriLanka !!!! A shipment of 40,000 tons of diesel, delivered with #Indian help, reached #Colombo yesterday (Monday) evening,” the Indian High Commission tweeted.

Energy for #SriLanka 🇱🇰!!!! A shipment of 40,000 tons of diesel, delivered with #Indian help, reached #Colombo yes… https://t.co/B1Pq26jdzz

— India in Sri Lanka (@IndiainSL) 1653964073000

India and Sri Lanka signed a US$500 million loan agreement for the purchase of petroleum products on February 2, 2022.

In the face of the economic crisis and a shortage of foreign exchange, India’s 500 million credit line for fuel imports has offered a lifeline to the island nation, which is currently experiencing its worst economic crisis since independence in 1948.

Long queues for fuel, cooking gas, scarce supplies and hour-long power outages have plagued the public for months.

A total of almost 400,000 tons of various types of fuel were delivered in March and April with Indian support.

In line with India’s neighborhood first policy, New Delhi has granted over US$3.5 billion in assistance to the people of Sri Lanka this year alone to help them overcome their current difficulties.