Cash-strapped Sri Lanka out of petrol: PM

May 17, 2022

COLOMBO: Crisis-hit Sri Lanka has run out of petrol and is unable to find dollars to finance essential imports, the new prime minister said on Monday in an address to the nation.'We have run out of...

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COLOMBO: Crisis-hit Sri Lanka has run out of petrol and is unable to find dollars to finance essential imports, the new prime minister said on Monday in an address to the nation.

"We have run out of petrol... At the moment, we only have petrol stocks for a single day," Ranil Wickremesinghe said, warning his bankrupt country could face more hardships in the coming months.

He said the government was also unable to raise dollars to pay for three shipments of oil, with the ships awaiting outside the Colombo harbour for payments before discharging their cargoes.

Sri Lanka is in the throes of its worst-ever economic crisis with its 22 million people enduring severe hardships to secure food, fuel and medicines while facing record inflation and lengthy power blackouts.

Wickremesinghe assumed office on Thursday after his predecessor Mahinda Rajapaksa was forced out after weeks of protests over the government´s handling of the economic crisis turned deadly.

"The next couple of months will be the most difficult ones of our lives," Wickremesinghe said. "I have no desire to hide the truth and to lie to the public." However, he urged people to "patiently bear the next couple of months" and vowed he could overcome the crisis.

He said the government had also run out of cash to pay the 1.4 million civil servants their salaries in May, and he will turn to money printing as a last resort. "Against my own wishes, I am compelled to permit printing money in order to pay state-sector employees and to pay for essential goods and services," he said

He also warned that fuel and electricity tariffs will be raised substantially and his government will also sell off its loss-making national carrier to reduce losses. Sri Lanka has sought an IMF bailout and one of the key demands of the international lender is for Colombo to divest loss-making state enterprises, including Sri Lankan Airlines whose carried-forward losses exceed a billion dollars.Sri Lanka´s new prime minister won crucial support from two main opposition parties on Monday, easing the pressure on the ruling Rajapaksa clan in the face of the island´s worsening economic crisis.The main opposition SJB party appeared to drop its demands that President Gotabaya Rajapaksa should step down before backing a coalition to manage the crumbling economy.

The SJB, or Samagi Jana Balawegaya, declined to join a unity government led by Wickremesinghe, but said it would "unconditionally support the positive efforts to revive the economy".

"It is important to save the country from the grave economic crisis," it said in a brief statement. And the second-largest opposition party, the Sri Lanka Freedom Party (SLFP), said it would join the cabinet.

Even so, thousands of protesters remained camped outside the sea-front office of 73-year-old President Gotabaya Rajapaksa, whose brother Mahinda quit as premier last week after political violence killed at least nine people.

Shortages of food, fuel and medicines, along with record inflation and lengthy blackouts, have brought severe hardships to Sri Lankans, in the worst financial crisis since independence from Britain in 1948.

Wickremesinghe´s appointment last week -- his sixth turn as prime minister -- has so far failed to quell public anger at the government for bringing Sri Lanka to the brink of economic collapse.

Troops patrolled the streets as consumers queued up for scarce supplies and the government announced that a six-hour night curfew will be reimposed from Monday after a 24-hour break for a religious holiday.Wickremesinghe has struggled to form a "unity government" and a cabinet swearing-in scheduled for Monday afternoon was pushed back as talks continued on sharing portfolios.

Four ministers were sworn in on Saturday, all from Rajapaksa´s Sri Lanka Podu Jana Peramuna (SLPP) party. But there is no finance minister yet, and it is widely expected that Wickremesinghe will retain the crucial portfolio to lead ongoing negotiations with the IMF for an urgent bailout.

The new prime minister held talks on Sunday with World Bank and Asian Development Bank representatives in Colombo on medicine, food, fuel and fertiliser supplies, his office said in a statement.

Long queues stretched outside the few fuel stations that were still open on Monday as motorists waited for rationed petrol. Heavily armed troops were patrolling the streets with a state of emergency still in effect after at least nine people were killed in violence last week. Police said over 350 people have been arrested in connection with last week´s mob violence.

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