Indian Economy News

Sri Lanka, Indian Oil Corp unit to sign oil tank restoration deal

  • IBEF
  • January 3, 2022

Sri Lanka's energy minister Mr Udaya Gammanpila said on Friday, 31 December that the country will sign an agreement with Lanka Indian Oil Corporation (LIOC) to rebuild 75 oil tanks on its eastern coast as part of its efforts to get a $500 million fuel credit line from India. The planned agreement will give LIOC, a subsidiary of Indian Oil Corporation (IOC), a 50-year lease on 14 tanks and a 49 percent stake in 61 other tanks held jointly with the state-run Ceylon Petroleum Corporation (CPC). The remaining 24 tanks will be kept by the Sri Lankan government. The cost of restoring per tank is estimated to be around $1 million.

Sri Lanka is also nearing completion on a $500 million credit line with India's Exim Bank, likely to be signed in the next 3-4 weeks, as per the minister. Sri Lanka would be able to purchase refined petrol and diesel from Indian sources thanks to the credit line. Sri Lanka spends over $3.5-$4 billion on petroleum each year.

Two sources in the Finance Ministry confirmed to Reuters that Sri Lanka is discussing an additional $1 billion credit line with India.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.