Sri Lanka’s energy minister has said the country’s fuel supplies will run out in a few days, forcing nationwide school closures and prolonged power cuts, as the worst economic crisis in its history continues.
Kanchana Wijesekera said fuel stocks were enough to last less than a day under current demand, and petrol and diesel was being limited to essential services such a healthcare and public transport in order to stretch out the remaining supplies for a few more days and ensure the country did not shut down entirely.
Sales of fuel for private vehicles have been banned for at least the next week, but outside petrol stations across the country there were still miles-long queues of vehicles.
The fuel crisis is affecting almost every element of life in Sri Lanka, preventing people from being able to go to work and school. On Sunday, school closures in Colombo and other major cities were extended for another week as teachers and pupils have been unable to travel to classrooms. Power cuts lasting up to 14 hours have been imposed to preserve fuel.
Another shipment of diesel is due at the weekend and petrol is due in two weeks, but Wijesekera admitted Sri Lanka did not have the money to pay for the shipments. They will total about $587m, and the country has only $125m left in the bank.
The government is already about $800m in debt to several fuel suppliers as its reserves of foreign currency have run dry and it has been barred from borrowing any more money from international markets. It has been negotiating with Russia to try to acquire some cheap fuel.
Sri Lanka has been facing fuel shortages for months as it grapples with a financial crisis that has left it unable to import essentials such as food and medicines. In June, the prime minister, Ranil Wickremesinghe, told parliament that “our economy has completely collapsed”, and the UN has said the country is facing a dire humanitarian crisis.
Inflation has hit 54%, leaving many households unable to afford basic items, especially as most food items have more than doubled in price.
Sri Lanka was seen as one of the most rapidly developing south Asian nations, with a fast-emerging, well-educated middle class, but many fear that the decades of progress will be undone by this crisis.
The economic woes stem from a decades-long trade deficit and culture of heavy foreign borrowing, which have left Sri Lanka with debts of $51bn that it cannot afford to repay. Since 2019, ill-advised decisions by the government of President Gotabaya Rajapaksa have led to state revenue falling by more than 1tn rupees, and the island of 22 million people was also hit hard financially by the impacts of Covid on tourism.
The country is facing bankruptcy after it was forced to default on several billion dollars of foreign loan repayments. It is in discussion with the International Monetary Fund over a $3bn bailout and help with restructuring its loans, but officials have said a programme could take months to be agreed. Countries including India, China and the US have provided emergency financial assistance in recent weeks.