Sri Lanka is in crisis as they are down to their very last 15,000 tons of petrol and diesel.
When Sri Lanka installed a new prime minister in May, he warned that the country would soon run out of fuel. Prime Minister Ranil Wickremesinghe said back in May that the government needs US 75 million (RM329.23 million) in foreign exchange to pay off debts, including oil shipments.
Well, the day of crisis has arrived as a top government minister said that the country is down to its last 15,000 tons of petrol and diesel and will only use them to keep essential services running in the coming days.
Picture credit: CNN
According to The Star, the island is under its worst financial crisis in seven decades. As a result, foreign exchange reserves are at record lows, leaving it scrambling to pay for essential imports, including fuel, food, and medicine.
“We are struggling to find suppliers. They are reluctant to accept letters of credit from our banks. There are over $700 million in overdue payments, so now suppliers want advance payments,” said Power and Energy Minister Kanchana Wijesekera, as reported by The Star.
“We have about 9,000 tons of diesel and 6,000 tons of petrol left. We are doing everything we can to get new stocks, but we don’t know when that will be.”
People are already waiting in long queues outside pumps, but they are unlikely to get fuel as the government will focus on issuing the remaining stocks for public transport, power generation, and medical services, Wijesekera said.
In a desperate move, Sri Lanka announced that it would send its ministers to Russia and Qatar in an attempt to get cheap oil prices a day after the country stopped selling fuel to the public.
Since the beginning of the year, diesel prices have risen almost four times, while gas prices have nearly tripled. According to Wijesekera, there will be an uncertain delay in sending new oil supplies.
He urged vehicle owners not to queue until the government introduced a token system for a limited number of vehicles on a daily basis.
In the meantime, the government has asked about one million public employees to work from home until further notice.
Why is Sri Lanka in such bad shape?
According to the BBC, Sri Lanka is in crisis as its foreign currency reserves have virtually run dry, and it can no longer afford to pay for imports of staple foods and fuel.
The government blames the Covid pandemic, which affected Sri Lanka’s tourist trade – one of its biggest foreign currency earners. It also says tourists have been frightened by a series of deadly bomb attacks on churches in 2019.
However, many experts say economic mismanagement is to blame.