India sends fuel consignments to Sri Lanka to help mitigate power woes

India on Wednesday sent two fuel consignments to neighbouring Sri Lanka as the island nation is suffering through its worst economic crisis in decades. The consignments carry 36,000 tonnes of petrol and 40,000 tonnes of diesel, India's high commission to Sri Lanka informed on Wednesday.

This comes a week after a consignment of 40,000 metric tonnes of diesel, the fourth such assistance from New Delhi, was delivered to Sri Lanka. So far, India has supplied 270,000 tonnes of fuels to help ease the power crisis in Sri Lanka after the financial woes led to a shortage of fuels and power cuts.

Recently, India also announced $1 billion as a credit to Sri Lanka to help shore up the sinking economy and keep their food prices and fuel costs under check.

Scarce supplies of food and fuel, along with record inflation and blackouts, have inflicted widespread misery in Sri Lanka's worst economic crisis since independence from Britain in 1948. The Sri Lankan rupee became the worst-performing currency as it depreciated against the dollar, while foreign debt mounted.

The Sri Lankan government's income has also taken a big hit after the tourism-dependent economy was hit by the 2019 Easter bombings and the Covid-19 pandemic.

According to experts, the crisis was further exacerbated by the government's mismanagement and years of accumulated borrowing and ill-advised tax cuts.

Rating agencies have warned of a potential default on Sri Lanka's $51 billion foreign debt, and authorities are unable to raise more commercial loans because of credit downgrades.

Meanwhile, the Sri Lankan government led by president Gotabaya Rajapaksa has said it will seek an IMF bailout to overcome the crisis but negotiations are yet to begin.