Colombo To Pay Iran US$251m Oil Import Fees Via Barter Tea

Iran and Sri Lanka signed a memorandum of understanding (MOU). According to it Sri Lanka will settle the US$251 million in oil import expenses owed to Iran by bartering.

The agreement was signed in Colombo on Tuesday by Alireza Peyman Pak, head of Iran’s Trade Promotion Organization (TPO), and Ramesh Pathirana, Minister of Plantation of Sri Lanka, on the TPO portal.

In the past few decades, Iran has been one of the top ten importers of Ceylon tea.

The United States imposed sanctions on Iran and lacked payment mechanisms accepted through the banking system. Hence, Sri Lankan tea exporters found it challenging to obtain export revenue from Iranian buyers.

According to Ceylon Today, the proposed plan is to seek a mechanism to resolve the outstanding long-term debt of Ceylon Petroleum Company (CPC) to the National Iranian Oil Company (NIOC) of US$250,925,169 by increasing exports of Ceylon tea Possibility.

At the same time, when the head of TPO met with the Minister of Plantation of Sri Lanka and the chairman of the Sri Lanka Chamber of Commerce, the two parties emphasized the establishment of a joint chamber of commerce and the establishment of an Iranian production unit in the dairy and food industries in Sri Lanka. Sri Lanka aims to re-export to countries without tariffs and export tractors and Iranian petrochemical products to Sri Lanka. It will do this to develop trade relations between the two countries.

During the visit, Peman Parker introduced Iran’s industrial capabilities and measures to develop trade between Iran and regional countries. Moreover, he introduced Iran’s achievements in the fields of medical equipment, medicine, and intellectual products.