Sri Lanka approves Indian Oil expansion
Sri Lanka has approved the LIOC for India's Lanka Indian Oil Corporation to open 50 new fuel stations, as part of an effort to reduce the severe shortages that have crippled the island nation, a company official said on Monday.
Sri Lanka is in a worst financial crisis in more than 70 years because of a shortage of foreign exchange, which has left it struggling to pay for essential food, medicine and fuel.
LIOC, the smaller player in the island's fuel supply duopoly, already has 216 fuel stations and will invest around 2 billion rupees $5.5 million in expansion, its Managing Director Manoj Gupta told Reuters.
LIOC is a subsidiary of India's Indian Oil Corporation IOC.NS and is listed on the Colombo Stock Exchange.
We have been trying to get this approval for a long time and we are more than willing to come forward and play a larger role to support and work with Sri Lanka to solve its challenges, Gupta said.
LIOC's retail expansion is a result of a separate agreement signed in December to gain control of 75 oil tanks in a strategically important storage facility near Sri Lanka's eastern port of Trincomalee.
In the last two months, the company has stepped up supplies to CPC after Sri Lanka ran short of dollars to pay for shipments, forcing consumers to wait in long lines, sometimes for days.
India has poured about $4 billion into its southern neighbour this year to prop up the economy, including swaps and multiple credit lines to purchase fuel, food and fertilizer.
Sri Lanka is in discussions with the International Monetary Fund IMF for a possible $3 billion bailout package, besides seeking assistance from China and Japan.