A week ago, the government announced that it was suspending all imports from July 3, 2020 to July 3, 2022, as the country was struggling to pay for fuel shipments. This announcement was followed by protests and a boycott of parliament by the main opposition parties. The government is now looking abroad for financial assistance. The power and energy minister met the energy minister of Qatar on Monday to discuss a line of credit from the country’s development fund. Another government minister will travel to Russia to discuss the issue.
Fuel shipments to Sri Lanka are becoming increasingly scarce as the government continues to struggle to make payments. The government has ordered new stocks and is expecting the first ship with 40,000 metric tons of diesel to arrive on Friday. But the government needs at least $48 million in funding to meet its obligations to its fuel suppliers. Meanwhile, schools and public services have been shut down for two weeks.
Fuel stocks are low: the nation has less than a day’s worth of petrol in stock, and the next shipment of diesel is due on the weekend. Meanwhile, there are also problems with the country’s finances. The central bank has just $125 million in the bank for fuel purchases, while the country owes $800m to seven suppliers. Last week, the government imposed a ban on private fuel sales for two weeks.
The Sri Lankan economy is suffering under the pressure of heavy debts, loss of tourism revenue, and skyrocketing commodity prices. It is headed for bankruptcy. Many importers have halted their shipments until the end of next year. In the meantime, the country continues to struggle to pay for fuel, milk, cooking gas, toilet paper, and other vital supplies.