Nov 07 (LBO) – Sri Lanka is to ask Reliance Industries of India and Petronas of Malaysia for extended credit on fuel purchases, to ease recent pressure on the exchange rate. Meanwhile, the government is also considering offering targeted subsidies for kerosene to Samurdhi beneficiaries, while allowing Ceypetco to sell at market rates, an official said.
Currently, kerosene is sold at 48 rupees a litre, well below the actual cost of 61 rupees.
The government recently removed fuel subsidies allowing both retailers to set rates, with a recent study by the International Monetary Fund showing that 74.9 percent of Sri Lanka’s fuel subsidies reached 60 percent of the highest income classes.
We will be requesting for extended credit for about three to six months from Reliance and Petronas because of the difficulty of the central bank in raising foreign exchange (to pay for purchases), a top official with state run oil giant, Ceylon Petroleum Corporation, told LBO on Tuesday.
Sri Lanka currently buys refined products from Reliance through spot tenders on the world market, but Ceypetco says Reliance has been offering the best premiums in the past few