Sri Lanka signs tea for oil deal with Iran
View(s):Sri Lanka on Tuesday inked a contra deal to sell Ceylon Tea in return for the oil purchases made by the Ceylon Petroleum Corporation (CPC).
Official sources told the Business Times that an Iranian delegation in the country had signed the tea for oil deal with the
Sri Lanka Tea Board.
Iran and Sri Lanka finalised the text on an MOU to carry out sale of Ceylon Tea in exchange for deducting the debt on fuel imports purchased nearly eight years back.
Sri Lanka purchased US$250 million worth of fuel about eight years back and this amount will be settled by sending tea stocks to Iran and the Sri Lankan government will pay the money to the local exporter.
According to the agreement worked out at that time it was decided that about $5 million worth of tea stocks will be sent monthly to Iran that will cover the debt owed to for oil purchases made by
Sri Lanka in the past.
This MOU is expected to settle
Sri Lanka’s long outstanding debt and particularly a win-win situation for Sri Lanka.
Signing of this MOU had been delayed due to the Presidential elections in 2019 and later the pandemic.
Sri Lanka has been unable to carry out direct trading with Iran following the US sanctions imposed on Iran and as a result had been negotiating to settle its debts in oil for tea exports that were hit as a result of these issues.
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