Sri Lanka to hold talks with Indian Oil to tide over energy crisis

Power Minister Gamini Lokuge said that the talks with the Indian Oil Corporation's local entity would be held for a solution to the fuel crisis

Sri Lanka will hold talks with the Indian Oil Corporation on Tuesday as part of a desperate measure to tide over the current fuel and energy crisis faced by the island nation, Power Minister Gamini Lokuge said on Monday.

Lokuge said that the talks with the Indian Oil Corporation's local entity would be held for a solution to the fuel crisis.

The Lanka IOC, the Sri Lankan subsidiary of India's oil major Indian Oil Corporation (IOC), has been in operation in Sri Lanka since 2002.

I have asked my officials to start talks with the LIOC tomorrow (Tuesday), I will join if necessary, the power minister said.

He said that the continuous electricity supply could be assured until January 22. Previously, he said the supplies could be ensured until January 18.

Energy Minister Udaya Gammanpila had said that there was no point in discussing with the power ministry on continued supplies of diesel and furnace oil required to generate power.

They must find their own dollars to pay for the supplies and order their requirements well in advance, Gammanpila said.

He said that the country's national carrier, Srilankan Airlines, had found dollars on their own to pay for fuel supplies.

Sri Lanka is currently facing a severe foreign exchange crisis with falling reserves.

The country is grappling with a shortage of almost all essentials due to the lack of dollars to pay for the imports.

Additionally, power cuts are imposed at peak hours as the state power entity is unable to obtain fuel to run turbines.

The state fuel entity has stopped oil supplies as the electricity board has large unpaid bills. The only refinery was recently shut as it was unable to pay dollars for crude imports.

Early this week, the Indian government announced a billion dollar assistance package in addition to other balance of payment support to Sri Lanka.

The billion dollar loan credit facility is to be used to avert a food crisis while allowing for the import of items and medicines. Additionally, there will be USD 500 million for importing fuel from India.