Negotiations on oil storage tanks are currently underway. (Represent)
Colombo:
Sri Lanka’s Energy Minister Udaya Gammanpila said Sri Lanka was nearing finalization of negotiations with India to buy back 99 World War II-era oil storage tanks for lease to the Indian Oil Corporation in the port district of Trincomalee located in Trincomalee. strategy on the east coast of the country. .
The Port of Trincomalee, one of the deepest natural harbors in the world, was developed by the British during the Second World War.
Since 2003, India Lanka Petroleum Corporation, the Sri Lankan subsidiary of the Indian Petroleum Corporation (IOC), has the right to lease 99 storage tanks at the facility for a term 35 years with annual payments of $100,000.
Mr. Gammanpila earlier this year made clear his intention to buy back the tanks.
“According to my instructions, Ceylon Petroleum Corporation has established a new organization dedicated to handling oil tanks after they have been requested back. Trinco Petroleum Terminal Limited has been established,” the minister said.
Mr Gammanpila said negotiations were ongoing and progress would be revealed.
In October, Foreign Minister Harsh Vardhan Shringla visited the World War II-era oil storage facility in the strategically important port district of Trincomalee on Sri Lanka’s east coast, which is a bilateral economic partnership. important for many decades.
Negotiations over oil storage tanks are underway even as the Sri Lankan government is in the process of negotiating a credit line with India to purchase petroleum products amid the foreign exchange crisis.
Sri Lanka closed its only refinery in November because it could not find dollars to pay for its crude oil imports.
The foreign exchange crisis has affected imports of essential commodities, leading to shortages in the island nation.
Former Prime Minister Ranil Wickremesinghe, now a figure in the Opposition, on Tuesday urged the government to expedite talks with India to facilitate imports of oil and food.
He warned that the country would face a major food shortage crisis in April.
Meanwhile, the Central Bank of Sri Lanka on Wednesday announced that the country’s foreign exchange reserves have improved to remain at $3.1 billion.
“Foreign currency inflows are expected to be forthcoming and with the recent receipt of inflows, official reserves have now reached approximately $3.1 billion,” it said in a statement.
However, the bank was unable to outline how the situation has improved from a low of $1.58 billion, where it had reserves at the end of November.
It describes measures taken by the Central Bank to improve foreign exchange liquidity in the domestic market, such as the introduction of incentive programs for workers’ remittances, and regulations on The repatriation and conversion of export currency boosted official reserves.
“Accordingly, the Government and Central Bank are confident that the reserve position will remain at a comfortable level throughout 2022,” it said.
The central bank has blamed international rating agencies for downgrading the country’s economy.
“Unfortunately, the hasty and inexplicable decisions of certain rating agencies to downgrade sovereign, even in the face of clear assurances of impending foreign exchange cash flows. , has caused undue damage in the secondary market to investors in the International Sovereign Bonds issued by the Government of Sri Lanka.
“Such rating actions also negatively affect investor confidence, leading to undue delays in some expected foreign currency flows that could have come to fruition sooner, if not.” must be such unwarranted and questionable ratings actions.”
The US credit rating agency Fitch expressed doubts about Sri Lanka’s ability to meet its immediate international debt commitments.
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
