Cash-strapped Sri Lanka out of petrol, says PM Wickremesinghe

Vehicles queue for petrol as Sri Lankan Prime Minister Ranil Wickremesinghe said the government could not pay for oil shipments. PHOTO: EPA-EFE

COLOMBO (REUTERS, AFP, BLOOMBERG) - Sri Lanka’s new Prime Minister said on Monday (May 16) the crisis-hit nation was down to its last day of petrol, as the country’s Power Minister told citizens not to join the lengthy fuel queues that have galvanised weeks of anti-government protests.

Mr Ranil Wickremesinghe, who was appointed prime minister last Thursday, said in an address to the nation that the country urgently needed US$75 million (S$105 million) in foreign exchange to pay for essential imports.

“At the moment, we only have petrol stocks for a single day. The next couple of months will be the most difficult ones of our lives,” he said. “We must prepare ourselves to make some sacrifices and face the challenges of this period.” 

Two shipments of petrol and two of diesel using an Indian credit line could provide relief in the next few days, he added, but the country is also facing a shortage of 14 essential medicines.

He said the country will privatise its state-run national carrier, Sri Lankan Airlines, to help pay off its debts.

Mr Wickremesinghe said he was forced to permit the printing of more money to pay salaries, accepting that it would add pressure on the rupee. 

The government will present a new “relief” budget for this year to replace the current spending Bill, he said, adding that he expects a 13 per cent budget deficit for 2022.

The crisis has led to widespread protests against President Gotabaya Rajapaksa and his family, culminating in the resignation of his elder brother Mahinda as prime minister last week after fighting between government supporters and protesters killed 9 people and wounded 300.

The President replaced him with Mr Wickremesinghe, an opposition parliamentarian who has held the post five times previously, in a desperate bid to placate protesters.

But the protesters have said they will keep up their campaign as long as Mr Gotabaya Rajapaksa remains president. 

They have also labelled Mr Wickremesinghe a stooge and criticised his appointment of four Cabinet ministers, all members of the political party run by the Rajapaksa brothers. Mr Wickremesinghe said on Monday that he had taken on the role for the good of the country.

The main opposition Samagi Jana Balawegaya (SJB) party appeared to drop its demands that the President should step down before backing a coalition to manage the crumbling economy. 

The SJB declined to join a unity government led by Mr Wickremesinghe, but said it would “unconditionally support the positive efforts to revive the economy”. “It is important to save the country from the grave economic crisis,” it said in a brief statement. 

The second-largest opposition party, the Sri Lanka Freedom Party, said it would join the Cabinet.

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In Colombo, the country’s commercial capital, long queues of auto rickshaws, the most popular means of transport in the city, lined up at gas stations as drivers faced a fruitless wait for fuel.

“I have been in the queue for more than six hours,” said one driver, Mr Mohammad Ali. “We spend almost six to seven hours in the line just to get petrol.” 

Another driver, Mr Mohammad Naushad, said the gas station he was waiting at had run out of fuel.

“We’ve been here since seven to eight in the morning and it is still not clear if they will have fuel or not,” he said. “When will it come, no one knows. Is there any point in our waiting here, we also don’t know.” 

Hit hard by the Covid-19 pandemic, rising oil prices and populist tax cuts by the Rajapaksas, the strategic Indian Ocean island nation, where China and India are battling for influence, is in the midst of a crisis unparalleled since its independence in 1948.

A chronic foreign exchange shortage has led to rampant inflation and shortages of medicine, fuel and other essentials, bringing thousands out on the streets in protest.

A diesel shipment using an Indian credit line arrived in the country on Sunday, but has not been distributed across the island.

Power Minister Kanchana Wijesekera said on Monday: “Request the public not to queue up or top up in the next three days until the 1,190 fuel station deliveries have been completed.”

Mr Wickremesinghe has yet to announce key ministers including the crucial post of finance minister, who will negotiate with the International Monetary Fund for badly needed financial help for the country. 

Former finance minister Ali Sabry had held preliminary talks with the multilateral lender, but he quit along with Mr Mahinda Rajapaksa last week.

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