Sri Lanka runs out of fuel, comes to a near-standstill

Jun 28,2022

Sri Lanka runs out of fuel, comes to a near-standstill 

Colombo seeks ‘urgent’ supply from India, Russia, Qatar
Cash-strapped  Sri Lanka suspended nationwide fuel sales, except for essential services, for nearly a fortnight as the island faces a rapidly worsening economic crisis.

In a press conference held on Monday night, Cabinet spokesperson and Transport Minister Bandula Gunawardana said private vehicles will be barred from buying fuel until July 10, after which the government has promised to ensure the usual supply. Authorities halted bus services between provinces and urged citizens to work from home in a bid to save fuel. Schools also remain shut.

“Fuel will be issued only to health, defence, power and export sectors from midnight today until July 10,” Mr. Bandula Gunawardena told reporters.

The state-run Ceylon Petroleum Corporation (CPC) will issue diesel and petrol only for essential services with effect from midnight, he said. These services include ports, airports, health, food distribution and agriculture.

As fuel shortages intensified over the past couple of weeks, Sri Lanka’s roads looked empty, with more vehicles seen parked in long queues outside petrol stations than on the streets. On Tuesday, the capital city of Colombo was virtually shut down, even as the government hurriedly dispatched its ministers to Russia and Qatar to seek urgent supplies.

Colombo turns to India

Sri Lanka’s High Commissioner to India, Milinda Moragoda on Monday met Union Minister of Petroleum and Natural Gas, Hardeep Singh Puri in New Delhi to discuss the possibility of “securing petrol and diesel supplies that are required by Sri Lanka at present on an urgent basis”, the Sri Lankan mission in New Delhi said.

“Minister Puri responded positively in this regard and assured the High Commissioner of all possible support to Sri Lanka at this critical juncture,” it said in a statement.

India has so far extended nearly $4 billion in assistance to Sri Lanka since January 2022, facilitating loan deferments and by way of currency swaps and credit lines for essential imports. Sri Lanka’s Prime Minister Ranil Wickremesinghe recently told  The Hindu in an interview that Colombo was hoping to receive another credit line worth $500 million from India for fuel imports.
Fears of food insecurity
As Sri Lanka awaits emergency supplies from any willing bilateral partner, Minister of Power and Energy Kanchana Wijesekera on Tuesday said the Cabinet approved opening up the country’s fuel import and retail sales market to companies from oil-producing nations. “They will be selected on the ability to Import Fuel and operate without Forex requirements from the CBSL [Central Bank of Sri Lanka] and Banks for the first few months of operations,” he said in a tweet.

The acute fuel shortages have stalled production in the island nation, as farmers and fisherfolk have been severely affected without diesel and kerosene.

The aggravating economic meltdown has already sparked fears of starvation and food insecurity. Earlier this month, the United Nations put out an appeal for $47 million, seeking “life-saving aid” for 1.7 million people. “Prices have jumped significantly since the end of 2021, forcing families to resort to skipping meals, eating less expensive foods, or limiting portion sizes,” the UN noted.