Sri Lanka almost out of fuel, with no fresh supplies in sight – Troops open fire to quell rioting at fuel station – “Our economy has faced a complete collapse,” prime minister says

25 June 2022 (The Guardian) – Sri Lanka has increased the price of fuel by up to 22 percent after the energy minister warned it had virtually run out of petrol and diesel after several expected shipments were delayed.

Kanchana Wijesekera apologised to motorists as he said on Saturday that oil cargoes that were due last week did not turn up, while those scheduled to arrive next week will also not reach Sri Lanka due to “banking” reasons.

Ceylon Petroleum Corporation (CPC) said on Sunday it had raised the price of diesel, used widely in public transport, by 15% to 460 rupees ($1.27) a litre while upping petrol 22% to 550 rupees ($1.52).

A delegation from the US Treasury and the State Department has arrived for talks to “explore the most effective ways for the US to support Sri Lankans in need”, the US embassy in Colombo said.

“As Sri Lankans endure some of the greatest economic challenges in their history, our efforts to support economic growth and strengthen democratic institutions have never been more critical,” US ambassador Julie Chung said in a statement.

The embassy said it had committed $158.75m in new financing in the past two weeks to help Sri Lankans.

The UN has already issued an emergency appeal to raise $47m to feed the most vulnerable segments of the island’s 22 million people.

About 1.7 million need “life-saving assistance”, according to the UN, with four out of five people reducing their food intake due to severe shortages and galloping prices.

Sri Lanka is facing a serious shortage of foreign exchange to finance even the most essential imports, including food, fuel and medicines, and is appealing for international handouts.

Minister Wijesekera said the state-run CPC was unable to say when fresh oil supplies will be on the island. The corporation had also shut its only refinery over a shortage of crude oil, he added. […]

Last week, troops opened fire to quell rioting at a fuel station in Visuvamadu, 365km (228 miles) north of Colombo. Police said four civilians and three soldiers were wounded in the first instance of the army using live ammunition to contain unrest linked to the worsening economic crisis.

The government has shut non-essential state institutions along with schools for two weeks to reduce commuting because of the energy crisis, as well as giving public servants time off to grow food.

Several hospitals across the country reported a sharp drop in the attendance of medical staff due to the fuel shortage.

The prime minister, Ranil Wickremesinghe, warned parliament on Wednesday that the South Asian nation of 22 million people will continue to face hardships for a few more months and urged people to use fuel sparingly.

“Our economy has faced a complete collapse,” Wickremesinghe said.

“We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food.” [more]

Sri Lanka almost out of fuel, with no fresh supplies in sight

Sri Lanka’s economy has ‘completely collapsed,’ prime minister says

By Bryan Pietsch, Niha Masih, and Hafeel Farisz
23 June 2022

(The Washington Post) – “Collapsed.” A “serious situation.” And potentially, a “fall to rock bottom.”

Those are some of the ways Sri Lanka’s prime minister described his country’s faltering economy Wednesday as the island nation faces extreme food and fuel shortages.

The comments to Parliament from Prime Minister Ranil Wickremesinghe come after weeks of turmoil caused by government incompetence, experts say — a dynamic exacerbated by global inflation and supply chain disarray amid the Russian invasion of Ukraine and the lingering impacts of the coronavirus pandemic.

“We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food,” Wickremesinghe said, speaking in Sinhala. “Our economy has faced a complete collapse.”

Sri Lanka, a country of 23 million off the southeastern coast of India, has essentially had the door to fuel supplies shut in its face, as its national Ceylon Petroleum Corp. is $700 million in debt.

“No country or organization in the world is willing to provide fuel to us,” the prime minister said. “They are even reluctant to provide fuel for cash.”

The economic chaos follows an explosion of political unrest: Protests sparked by brewing economic uncertainty and anger over corruption among the ruling Rajapaksa family forced Gotabaya Rajapaksa, the president, to oust his brother, Mahinda Rajapaksa, from the prime minister’s office last month. Wickremesinghe was appointed shortly afterward.

Though Wickremesinghe’s proclamation was dramatic, it wasn’t necessarily overstated. “The economy is certainly on the brink of collapse,” said Nirvikar Singh, an economics professor and expert on South Asia at the University of California at Santa Cruz. The government has been “astonishingly irresponsible and incompetent,” having mismanaged the country’s monetary, fiscal and other economic policies since 2019, he said.

In recent days, lines for gasoline have stretched for miles. On Monday, schools and government offices in major cities were shuttered for at least a week with the fuel shortage forcing the country to a halt.

Food insecurity has also plagued Sri Lanka, with data from the country’s central bank showing a sharp uptick in prices for all food items. Rice, a staple in the country, costs nearly three times as much as it did a year ago. Prices of essential produce such as tomatoes have gone up by four times from the previous year. Last week, government workers were asked to grow their food in their backyards.

The signs of the devastating crisis are everywhere, including medication shortages at hospitals and businesses on the brink of closure. At the main public hospital in the capital, Colombo, essential supplies such as medicine and catheters are scarce.

“We are trying to manage somehow, but there is a dearth,” said the hospital’s spokeswoman, Pushpa De Soysa. “We just have to be judicious in using what we have.”

In the nearby, once-bustling Colpetty neighborhood, restaurant owner Pradeep Vithanachchi has turned to the black market for cooking gas, which is hard to find and expensive when sporadically available.

“It is now an existential crisis for both the business and us,” he said of the restaurant — a fixture there for four decades that he inherited from his father. [more]

Sri Lanka’s economy has ‘completely collapsed,’ prime minister says