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Sri Lanka To Run Only Essential Services Till July 10 Amid Acute Fuel Shortage

The Sri Lankan government said talks were held with India for a fresh credit line and negotiations are underway to buy discounted Russian oil.

People wait to buy fuel at a fuel station in Colombo, Sri Lanka.
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Days after Sri Lankan Prime Minister Ranil Wickremesinghe said the country's economy has "collapsed", the government on Monday announced that only essential services will operate from midnight till July 10 and all other operations will be temporarily suspended as the country faces acute fuel shortage.

"Fuel will be issued only to health, defence, power, and export sectors from midnight today until July 10," said Cabinet spokesperson Bandula Gunawardena.

This is the latest hit to Sri Lanka that has been going through its worst financial crisis ever. The debt-laden country has been facing months of shortages of food, fuel, and electricity, and cannot even purchase imported oil.

The state-run Ceylon Petroleum Corporation (CPC) said it will issue diesel and petrol only for essential services with effect from midnight. These services include ports, airports, health, food distribution and agriculture, a report said, quoting transport minister Gunawardena.

"All other sectors must prepare from work from home programme," he said, urging the public to support the government's move to limit the consumption of fuel.

While the government said talks were held with India for a fresh credit line, negotiations to buy discounted Russian oil have also got underway. The government said a ministerial delegation is to visit Russia for talks.

Wickremesinghe told Parliament on Wednesday that currently CPC has $700 million in debt. He said, "As a result, no country or organisation in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash."

The nearly-bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, had announced in April that it is suspending nearly $7 billion foreign debt repayment due for this year out of about $25 billion due through 2026. Sri Lanka's total foreign debt stands at $51 billion.

The foreign currency crisis has crimped imports, creating severe shortages of food, vehicular fuel, cooking gas, electricity, and other essentials like medicines, forcing people to stand in long lines to fulfil basic needs. Prices of all essentials have also skyrocketed amid shortages.?

The Indian credit lines since January have provided a lifeline to Sri Lanka amidst growing public dissent over the worsening economic conditions. However, Wickremesinghe said India would not be able to keep Sri Lanka afloat for too long.?

Total recent Indian aid to Sri Lanka is $3.5 billion, according to The Indian Express. The report added that development assistance extended by India stands at over $5 billion.

(With PTI inputs)