Soothing Oil

India has come through with a US$ 150 mn credit line, allowing Sri Lanka to fill up her fuel tanks with refined petroleum products for six months. India has come through with a US$ 150 mn credit line, allowing Sri Lanka to fill up her fuel tanks with refined petroleum products for six months. Indian state owned Oil and Natural Gas Corp. will deliver the load as soon as procurement agreements are reached with Ceylon Petroleum Corp. (CEYPETCO).

A CEYPETCO statement Wednesday said the deal was signed in Mumbai, India in mid October with the Export and Import Bank of India.

The facility, repayable over 7 years at an annual interest rate 0.5 percent above the London Inter-bank Offered Rate (LIBOR) is expected to help Sri Lanka tide over the current oil crises, higher winter demand and until global prices settle down by early 2005.

Crude oil prices are just below US$ 50 per barrel after climbing to over US$ 54 a barrel in October.

Given the improving trend, government officials are hoping that prices would settle down between US$ 45 in the medium term.

The State is also trying to tap the OPEC Fund for soft loans to partially