Petro Facility

Jan 03, 2012 (LBO) – Sri Lanka is negotiating a billion dollar facility from an international bank to defray payments for petroleum imports by made state-run Ceylon Petroleum Corporation in 2012, officials said. By October 2011 Sri Lanka had spent 3.6 billion dollars on petroleum imports up 48.5 percent from a year earlier.

A failed monsoon had also increased petroleum fired power generation. Sri Lanka however has not adjusted power prices up to extirpate aggregate demand in the economy and reduce pressure on the balance of payments.

Central Bank Governor Nivard Cabraal said petroleum imports had increased by 1,500 million already in 2011 as had capital and investment goods and the central bank was keen not to curtail imports as they were necessary to keep the economy ticking.

Assistant Governor K D Ranasinghe said the state-run CPC is expected to begin negotiations with an undisclosed international bank soon for revolving facility of a billion dollars it can use for petroleum payments.

The bank had already made a proposal but the terms had to be worked out, he said.