Sri Lanka stops sale of fuel except to essential sectors
Two-week suspension 'to conserve the little reserves we have', says government
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COLOMBO • Cash-strapped Sri Lanka has announced a two-week halt to all fuel sales except for essential services and appealed to the private sector to let employees work from home after running out of supplies.
"From midnight today, no fuel will be sold except for essential services like the health sector, because we want to conserve the little reserves we have," government spokesman Bandula Gunawardana said on Monday.
He apologised to consumers for the shortages. "We regret the inconvenience caused to the people," he said, adding that inter-provincial public transport would likely come to a halt.
"Port, health services, food transport will be provided petrol and diesel, while all other sectors are requested to stay at home and provide services online in this difficult time," Mr Gunawardana said. "Our country is facing an unprecedented state of finance and foreign exchange crisis."
Sri Lanka is facing its worst economic crisis since gaining independence in 1948, and has been unable to finance even the most essential products, such as fuel, food and medicines, since late last year.
The country is also facing record high inflation and lengthy power blackouts, all of which have contributed to months of protests - sometimes violent - calling on President Gotabaya Rajapaksa to step down.
The state sector shutdown was meant to end this week, but it is now extended till July 10, with Mr Gunawardana promising to restore fuel supplies by then, and the government is appealing to the private sector to follow suit. The unexpected announcement came a day after Colombo said it will implement a token system to ration the distribution of limited fuel stocks.
Four out of five people in Sri Lanka have started skipping meals as they cannot afford to eat, the United Nations has said, warning of a looming "dire humanitarian crisis" with millions in need of aid.
Sri Lanka defaulted on its US$51 billion (S$70.6 billion) foreign debt in April, and is in talks with the International Monetary Fund for a bailout.
The government had already closed public schools and asked civil servants to work from home to curtail transport, leaving many roads in and around the capital, Colombo, deserted over the past days, even as thousands of vehicles lined up in queues stretching for kilometres waiting for filling stations to be replenished.
Mr Milinda Moragoda, Sri Lanka's High Commissioner to New Delhi, met Mr Hardeep Singh Puri, India's Minister for Petroleum and Natural Gas and Housing and Urban Affairs Minister, in New Delhi on Monday to discuss the possibility of securing petrol and diesel supplies that are required by the island nation on an urgent basis.
Meanwhile, Sri Lanka will allow companies from oil-producing countries to import and sell fuel, the Power and Energy Minister said yesterday, ending a longstanding duopoly. The Cabinet decision came as the minister, Mr Kanchana Wijesekera, headed to Qatar and a ministerial colleague was due to visit Russia on Sunday for talks on energy deals.
State-run Ceylon Petroleum Corporation (CPC) controls about 80 per cent of the fuel market and Lanka IOC - a unit of Indian Oil Corporation - controls the rest.
The Cabinet also allowed bunkering companies registered with the government to import jet fuel so that flights are not disrupted, the government said in a statement.
Separately, Sri Lanka's heavily loss-making state-run electricity monopoly asked for a price rise of over 800 per cent for its poorest customers, regulators said on Monday.
The Ceylon Electricity Board (CEB) lost 65 billion rupees (S$250 million) in the first quarter and sought an 835 per cent price hike for the smallest power consumers for whom services are heavily subsidised, said the Public Utilities Commission of Sri Lanka (PUCSL).
835%
Price hike the state-run monopoly Ceylon Electricity Board is seeking for the smallest power consumers, after it lost 65 billion rupees (S$250 million) in the first quarter.
Currently, anyone using less than 30 kilowatts a month pays a flat 54.27 rupees, which the CEB sought to raise to 507.65 rupees.
"A majority of the domestic consumers will not be able to afford this type of steep increase," PUCSL chairman Janaka Ratnayake said.
"Hence, we proposed a direct subsidy from the Treasury to keep the increase to less than half of what they have asked."
REUTERS, AGENCE FRANCE-PRESSE