Sri Lanka halts fuel supply for non-essential services as crisis worsens

By Uditha Jayasinghe

COLOMBO (Reuters) – Sri Lanka will close schools and only allow fuel for essential services like health care, trains and buses for two weeks from Tuesday, a minister said, in a desperate attempt to deal with a serious crisis. scarcity.

Sri Lanka is suffering its worst economic crisis, with currency reserves at record lows and the island of 22 million people struggling to pay for essential imports of food, medicine and, most critically, fuel.

Industries like apparel, a big dollar earner in the Indian Ocean country, are left with fuel for only about a week to 10 days. The country’s current inventories will run out in just under a week based on regular demand, Reuters calculations show.

Sri Lanka will only provide fuel for trains and buses, medical services and vehicles carrying food from Tuesday until July 10, Bandula Gunewardena, a government office spokeswoman, told reporters.

Schools in urban areas will be closed and everyone must work from home, he said. Interprovincial bus service will be limited.

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

Autorickshaw driver WD Shelton, 67, said he waited in line for four days to get gas.

“I didn’t sleep or eat right during this time,” he said. “We can’t win, we can’t feed our families.”

PEOPLE TRY TO ESCAPE

The government is talking to the International Monetary Fund (IMF) about a possible bailout, but many people cannot wait that long and the demand for passports has increased.

The navy in the early hours of Monday arrested 54 people on the east coast as they tried to leave by boat, a spokesman said, in addition to 35 “boat people” detained last week.

President Gotabaya Rajapaksa’s older brother resigned as prime minister last month after clashes between pro- and anti-government protesters escalated into nationwide violence that left nine dead and about 300 injured.

An escalation of fuel shortages could lead to a new wave of demonstrations.

Opposition leader Sajith Premadasa called for the government to step down.

“The country has completely collapsed due to fuel shortages,” he said in a video statement. “The government has lied to people repeatedly and has no plans on how to move forward.”

POWER OUTAGES

The government’s fuel stockpile is around 9,000 tonnes of diesel and 6,000 tonnes of gasoline, the energy minister said on Sunday, but no new shipments are expected.

Lanka IOC, the local unit of Indian Oil Corporation, told Reuters it had 22,000 tonnes of diesel and 7,500 tonnes of gasoline, and expected another shipment of 30,000 tonnes of gasoline and diesel combined around July 13.

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

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

“We have enough fuel for the next seven to 10 days, so we’re managing,” said Yohan Lawrence, secretary general of the Sri Lankan Joint Forum of Apparel Associations.

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

Sri Lanka’s energy regulator said the country is using its last supplies of furnace oil to operate several thermal power plants and keep power cuts to a minimum. Scheduled power outages will increase to three hours starting Monday from two and a half hours earlier.

“We expect to keep the power cuts to three to four hours for the next two months,” said Janaka Ratnayake, chairman of the Sri Lanka Public Utilities Commission. “But given the situation in the country, that could change.”

An IMF team is visiting Sri Lanka to discuss a $3 billion rescue package. The country hopes to reach a team-level agreement before the visit ends on Thursday, which is unlikely to release 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 fiscal management.

(Reporting by Uditha Jayasinghe; additional reporting by Waruna Karunatilake; Writing by Uditha Jayasinghe and Krishna N. Das; Editing by Clarence Fernandez, Nick Macfie and Deepa Babington)

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