Colombo, May 23: In a bid to cushion its economy from rising world oil prices, Sri Lankan government has asked for a new credit line from India so that it can subsidise fuel
prices in the island nation.
Subsidies on petrol, diesel and kerosene is estimated to cost Rs 300 million monthly and the government here is reluctant to raise prices ahead of the July local council
elections, according to a media report.
The Indian Oil Company, which maintains 100 pumping stations in the country, has not been able to raise prices to offset the higher costs because of Colombo's promises to
subsidise oil.
Indian diplomats here confirmed they have received a request for a new credit line over and above the $100 million facility which has been well used.
However, the exact amount sought by Colombo was not immediately clear and a response from Delhi will take time because the new government has just sworn in.
Bureau Report
