India, which is more than 85% dependent on overseas suppliers to meet its crude oil needs, imports oil from Saudi, Iraq and UAE as well as liquefied natural gas (LNG) from Qatar through the Strait of Hormuz.

Sri Lanka is seeking supply of gas in liquid form to meet requirements for generating electricity and other industries. It was in discussions with Petronet and other suppliers for years and it is only now that it has finally agreed to buy the fuel from the Indian firm.

“The renewal is at ‘significantly’ lower price than the current deal, at current prices India will save about USD 0.8 per million British thermal unit at the renewed terms, this translates into savings of USD 6 billion over the contract period”, sources said