Sri Lanka Halts Fuel Sales for Private Vehicles, Shuts Schools

Sri Lanka Halts Fuel Sales for Private Vehicles, Shuts Schools
People wait for fuel at a gas station in Colombo, Sri Lanka, on June 11, 2022. (Eranga Jayawardena/AP Photo)
Aldgra Fredly

Sri Lanka’s government has suspended fuel sales for private vehicles and urged people to work from home to save fuel as the country’s economic crisis continues unresolved.

Transport Minister Bandula Gunawardena said on Monday that fuel will only be sold for essential services, such as public transportation, health, food, and export industries, among others.

The measures will take effect from June 27 to July 10, Sri Lanka-based News First reported.

"From midnight today, no fuel will be sold except for essential services like the health sector, because we want to conserve the little reserves we have," Gunawardena told reporters.

Gunawardena said that all schools in Colombo, the capital city of Sri Lanka, would be closed for two weeks, while workers in non-essential industries were urged to work from home to conserve fuel.

Inter-provincial transport services will also be suspended to reduce the consumption of fuel in Sri Lanka, the minister said.

The decision came a day after Minister of Power and Energy Kanchana Wijesekera announced that Sri Lanka would establish a token system to distribute fuel to the people queuing at filling stations.

“If there are people queuing up at filling stations, the security forces including the army, air force, navy, and police will be deployed at every filling station from [June 27] to give everyone in the queues a token in the order they are queuing up,” Wijesekera said.

He urged people not to line up at petrol stations in the coming days as the government struggled to acquire fuel shipment.

Sri Lanka Eyeing Russian oil

Sri Lanka is in talks with Russia on possible direct fuel supplies, despite Western sanctions imposed against Russia for its invasion of Ukraine. Two Sri Lankan ministers left for Russia on Monday to acquire fuel from Moscow.

“There is an advantage for us if we could buy oil directly from the Russian government of the Russian firms. There are talks going on,” Wijesekera told reporters on June 26.

He noted that Sri Lanka bought a 90,000-metric-ton shipment of Russian crude last month to restart its only refinery.

Sri Lanka’s Prime Minister Ranil Wickremesinghe said on June 22 that the state-run Ceylon Petroleum Corporation was $700 million in debt and as a result, no country or organization was willing to provide fuel for cash.

Hundreds Attempt to Flee Sri Lanka

More than 300 Sri Lankans attempted to flee to Australia in the past few weeks due to the country’s economic turmoil that has left millions of its people in need of life-saving aid.
The Australian government has said that Sri Lankans who attempt to enter Australia illegally will be deported, Sky News reported.
According to local reports, Sri Lankan police have arrested about 399 people for attempting to flee to Australia. Police said that smugglers would charge between 200,000 rupees ($556) and 1,000,000 rupees ($2,778) to facilitate those seeking to migrate illegally.

The country is on the verge of bankruptcy, with its foreign exchange reserves plummeting by 70 percent in the past two years. The government said that it is unable to pay $7 billion in foreign debt due this year, and has sought assistance from the International Monetary Fund.

The top creditors for the debt are the Asia Development Bank for $4.4 billion, China for $3.39 billion, Japan for $3.36 billion, and the World Bank for $3.2 billion as of April.
Multilateral lending agencies, such as the Asian Development Bank and World Bank, offer very low interest rates ranging from 0.25 percent to 2 percent. According to Colombo-based think tank Verite Research, Beijing's interests rates have set the Chinese loans apart from other lenders, with interest averaging 3.3 percent, reported Asia Nikkei. Japan's rate stands at 0.7 percent.

The maturity period for Beijing's loan at 18 years is also shorter than for Japan's 34 years.

Thousands of Sri Lankans have taken to the streets to protest the government’s mishandling of the country’s economic crisis, leading to the resignation of then-Prime Minister Mahinda Rajapaksa on May 9.

Reuters contributed to this report.
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