External affairs minister Salman Khurshid won’t have comforting words for Maldives on fuels supplies as Mangalore Refinery & Petrochemicals Ltd (MRPL) has refused to supply transport fuels on extra concessional terms to the islands nation on the brink of bankruptcy.
MRPL managing director PP Upadhya told the petroleum ministry last month that the firm was “not in a position” to consider Maldives request for products supply. “We cannot accept open credit, knowing very well the financial health of Maldives,” wrote Upadhya.
MRPL’s decision followed a caution from the ministry of external affairs on January 24 that financial situation in Maldives was “precarious” as the country had only about $250-$300 million as foreign exchange reserves. However, in same breath, it requested that Maldives’ appeal be “sympathetically” considered as India had agreed to extend a standby credit facility of $25 million to the neighbour.
During Maldivian President Abdulla Yameen’s visit last month, India agreed to supply the nation with petroleum products to iron out kinks that emerged after a 2012 coup that ousted President Mohamed Nasheed and his successor cancelling a $511-million airport deal with GMR.
But, Maldives State Trading Organization later demanded payment terms of “at least six months of open credit for a value of $300 million” against its lifting of 2,40,000 tonnes of MGO, 1,14,000 tonnes of aviation fuel and 83,000 tonnes of premium gasoline annually.
“Our present financial condition is not very good. We cannot accept any commercial terms worse than that of STC Mauritius,” wrote the MRPL managing director on January 27.