Sri Lanka's remaining gasoline reserves are only enough for a day, Sri Lanka's electricity and energy minister, Vijay Sekla, said on July 3 local time.
Sri Lanka is mired in the midst of one of its worst economic crises in more than 70 years, with 22 million people deprived of oil, electricity, food and medicine for months.
Today, Sri Lanka is facing a situation of "running out of oil".
According to the BBC, Vijay Sekra said on July 3 that Sri Lanka's diesel reserves were 12,774 tons, while petrol reserves were only 4,000 tons. Gasoline reserves are only enough for one day, and the next batch of gasoline is expected to arrive in the country on July 22-23.
Xinhua news agency pointed out that at the same time as the fuel shortage, the Sri Lankan government's fiscal situation has deteriorated, and it is now saddled with heavy debt and faces foreign exchange shortages.
Sri Lanka 'runs out of oil'
To save fuel, the Sri Lankan government has taken some "extraordinary steps".
On June 27, the Sri Lankan government announced a moratorium on fuel sales to the general public, with the ban lasting until July 10. According to the BBC, the move is to supply the remaining fuel to buses, trains and vehicles that undertake the necessary services.
Some experts say it is the first country to take similar extreme measures since the oil crisis of the 1970s.
June 28, 2022 local time, Colombo, Sri Lanka. Sri Lankan authorities provided fuel only to basic services from midnight on June 27 to July 10. Figure/IC photo
Not only that, but schools in Sri Lanka's urban areas have been closed for the past half a month to reduce energy consumption. On July 3, the Sri Lankan government announced that schools would remain closed for a week until Friday.
On the same day, the Sri Lankan government also announced that it would have a nationwide power outage of up to 3 hours a day since July 4, because it could not provide enough fuel for the power station.
Power outages are no stranger to Sri Lankans, who have faced this dilemma for a long time over the past few months. At the same time, they are also facing a severe food crisis, a shortage of drugs, an inflation crisis and so on.
On June 13, the Sri Lankan government ordered its civil servants to work only four shifts a week and to go home on Fridays to grow food. This is partly to save fuel for civil servants to commute to work, and on the other hand, to alleviate the food shortage crisis facing the country.
According to Xinhua News Agency, the Chinese government has twice recently announced the provision of emergency humanitarian assistance to Sri Lanka. On June 28, a shipment of grain from Sri Lanka arrived at the Colombo International Container Terminal in Sri Lanka' capital.
On June 24, 2022, local time, in Colombo, Sri Lanka, a public servant tends to plants in a greenhouse in his garden. Sri Lanka declared Friday a statutory holiday for government employees to grow vegetables in their backyards to prevent food shortages. Figure/IC photo
According to the Associated Press, Vijsekra said the government had ordered new fuel and that the first 40,000 tons of diesel was expected to arrive in the country on Friday, while the first shipment of gasoline would have to wait until late July.
He said that the Sri Lankan government is still seeking other fuel supplies, but the most critical thing is that the government may not have enough foreign exchange reserves to cover planned fuel and crude oil imports.
The planned fuel order would cost at least $587 million, but the Central Bank of Sri Lanka would only be able to pay $125 million. In addition, Sri Lanka owes a total of $800 million to seven fuel suppliers for fuel ordered earlier this year.
According to the Associated Press, Sri Lanka's fuel comes mainly from neighboring India. But for now, the government is negotiating with suppliers from Russia and Malaysia to buy fuel.
The Government has called on expatriates to send remittances to the country
Crisis-ridden Sri Lanka faces many problems, but the main problem at present is the lack of money.
Sri Lanka's total external debt amounts to $51 billion, with a total of $25 billion to be paid by 2026 and another $7 billion to be paid this year, according to the Associated Press. On May 19, however, Sri Lanka fell into its first sovereign debt default since independence in 1948, unable to pay its creditors. At present, Sri Lanka has suspended the repayment of its external debt.
On June 27, 2022, local time, Colombo, Sri Lanka, there was a shortage of local fuel, and rickshaw drivers lined up to refuel. Figure/IC photo
"Raising money is a huge challenge." On July 3, Vijay Sekla said. He called on all Sri Lankans working overseas to send remittances domestically, especially through bank remittances rather than other private means.
Sri Lanka, where about 2 million people work overseas, used to send $600 million a month in remittances, but plummeted to $318 million in June.
Overseas remittances are the main source of foreign exchange in Sri Lanka. According to the Central Bank of Sri Lanka, remittances abroad are falling sharply. Remittances abroad were $2.8 billion in the first half of 2021, but only $1.3 billion in the same period in 2022, a decrease of more than half.
Foreign exchange reserves are woefully inadequate, which is a huge blow to Sri Lanka, an island nation that relies on imports for many basic supplies. At the same time, debt defaults discouraged overseas investment and led to a depreciation of the country's currency, the Sri Lankan rupee, which in turn made it more difficult for the country to borrow in the future.
On June 30, a new round of negotiations between the International Monetary Fund (IMF) and the Sri Lankan government ended. At the heart of the talks is a $3 billion bailout deal, but the two sides have yet to reach an agreement.
According to the US financial media CNBC, the IMF said in a statement on the same day that negotiations with the Sri Lankan government will continue to be held online in order to reach an extended fund facility (EFF) at the working level. The EFF was established primarily to help countries with serious balance-of-payments imbalances.
The IMF also said it would provide support to the Sri Lankan government to "change structural imbalances over a longer period of time."
Sri Lanka has high hopes for IMF assistance. On June 22, Sri Lankan Prime Minister Wickremesinghe said the country's economy had "completely collapsed" and that IMF aid was the only option to avert an economic catastrophe in Sri Lanka.
Beijing News reporter Xie Lian
Edited by Bai Shuang proofread by Liu Yue