Sri Lanka cuts fuel supply for non-essential services as crisis escalates

The country is in its worst economic crisis, foreign exchange reserves are at an all-time low and the island is home to 22 million people. do your best to pay for essential imported foodstuffs, medicines and, most importantly, fuels.

Industries such as clothing, which are highly profitable in the Indian Ocean country, are only left with fuel for a week to 10 days. Reuters estimates that the country’s current stocks will run out in just under a week, based on regular demand.

Sri Lanka will only issue fuel to trains and buses, medical services and food transport vehicles from Tuesday until July 10, cabinet spokesman Bandula Goonewardena told reporters.

Schools in urban areas will be closed and everyone is encouraged to work from home, he said. Intercity bus service will be limited.

“Sri Lanka has never faced such a severe economic crisis in its history,” said Goonewardena.

Auto-rickshaw driver W. D. Shelton, 67, said he had been waiting in line for fuel for four days.

“During this time I did not sleep and did not eat properly,” he said. “We can’t earn, we can’t feed our families.”

People try to run

The government is in talks with the International Monetary Fund (IMF) about possible rescuebut many people cannot wait that long, and the demand for passports has skyrocketed.

The Navy arrested 54 people off the east coast early Monday as they tried to get away by boat, a spokesman said, in addition to 35 “boatmen” detained last week.

Energy prices are causing havoc in Asia.  That's why the rest of the world should be worried

President Gotabay’s older brother Rajapaksa resigned as prime minister last month after clashes between pro- and anti-government protesters escalated into violence across the country, leaving nine people dead and about 300 injured.

Escalating fuel shortages could lead to a new wave of demonstrations.

Opposition leader Sajit Premadasa called on the government to resign.

“The country has completely collapsed due to lack of fuel,” he said in a video message. “The government has repeatedly lied to people and has no plan on how to move forward.”

power outage

The state stock of fuel is about 9,000 tons of diesel and 6,000 tons of gasoline, the energy minister said on Sunday, but no new supplies are expected.

Lanka IOC, the local division of the Indian Petroleum Corporation, told Reuters that it has 22,000 tons of diesel and 7,500 tons of gasoline, and another 30,000 tons of gasoline and diesel are expected to be shipped together around 13 July.

Sri Lanka consumes about 5,000 tons of diesel fuel and 3,000 tons of gasoline a day just to meet its transport needs, IOC Lankan chief Manoj Gupta told Reuters.

A man queues for fuel in Colombo on June 27.

Other big consumers are industries such as apparel and textiles, whose exports rose 30% to $482.7 million in May, according to data released Monday.

“We have enough fuel for the next 7-10 days, so we can manage,” said Johan Lawrence, general secretary of the Sri Lanka United Clothing Associations Forum.

“We are watching and waiting to see if new fuel supplies arrive and what will happen in the coming days.”

Sri Lanka’s energy regulator said the country is using its last remaining heating oil to run several thermal power plants and minimize power outages. Planned power outages will increase to three hours from Monday, up from two and a half hours earlier.

Sri Lanka struggles to secure fresh fuel supplies, minister says

“Our hope is that over the next two months, power outages will last three to four hours,” said Janaka Ratnayake, chairman of the Sri Lanka Public Utilities Commission. “But given the situation in the country, that could change.”

An IMF team visits Sri Lanka to negotiate a $3 billion bailout package. The country hopes to reach a staff-level agreement before the visit ends on Thursday, which is unlikely to secure any immediate funds.

It has received about $4 billion in financial assistance from India, and the Sri Lankan government said on Monday that the United States has agreed to provide technical assistance for its financial management.