Sri Lanka petroleum credit largely repaid: official

April 17, 2009 (LBO) – Most of the short term credits from Iran and private suppliers to Sri Lanka’s state-run petroleum retailer had been repaid, though the outflow worsened a balance of payments crisis in the island, a top central bank official said. The Ceylon Petroleum Corporation (CPC) had borrowed up to a billion US dollars from Iran on a revolving credit to cover imports of oil during 2008.

“It has come down to about 300 million (US dollars),” chief economist of Sri Lanka’s central bank Nandalal Weerasinge told reporters after releasing the annual report of the monetary authority.

The import letters of credit from Iran is largely held with state-run Bank of Ceylon.

CPC had also got about 700 million US dollars in credit from private suppliers who had also withdrawn their credit during the financial turmoil.

“Because of the problem they had, foreign lenders took it out,” he said.

CPC officials said last year Singapore-based Trafigura had given suppliers’ credit up to 500 million US dollars for refined products. In 2008 the total petroleum outflow was about 1.2 billion dollars, Weerasinghe said.

He said the petroleum credit flight contributed to the balance of payments crisis.

The CPC borrowed from forei