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Sri Lanka Announces Day Off As Fuel Runs Out, No New Supplies

Alex Peter by Alex Peter
June 17, 2022
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Sri Lanka Announces Day Off As Fuel Runs Out, No New Supplies

Sri Lanka is grappling with its worst ever economic crisis

Sri Lanka’s economic activity is coming to a near standstill as the island nation, facing its worst financial crisis, runs out of fuel for transport and there’s little signs of fresh supplies coming in.

The government declared Friday a holiday for public offices and schools to curtail vehicular movement, leaving many roads in and around the capital Colombo deserted. Meanwhile, thousands of vehicles are lined up in queues stretching for kilometers as drivers wait for filling stations to be replenished.

The Minister of Power and Energy Kanchana Wijesekera said on Thursday that the state-run Ceylon Petroleum Corp hadn’t received tenders for fresh stocks of fuel because suppliers were deterred by outstanding payments.

he South Asian nation has reached out to several companies and countries, including Russia, for supplies and was hoping for the approval from India for a fresh $500 million credit line for fuel imports, Wijesekera said.

Sri Lanka’s economic meltdown, the most dire in its independent history, has seen protests erupt across the island for the past few months seeking the ouster of President Gotabaya Rajapaksa and his family members from government. The clan has been blamed for taking decisions that have led to severe shortages of everything from fuel to medicine, inflation at nearly 40%, daily power outages of as long as 13 hours and a historic debt default.

The nation will need about $6 billion in aid from the International Monetary Fund and countries including India and China, to tide over the next six months, according to Prime Minister Ranil Wickremesinghe. Local authorities are looking to fast-track bailout talks with the IMF in order to get other fresh sources of funding.

Sri Lanka’s economy likely contracted in the first quarter, slammed by the public protests, political instability, high commodity prices and supply-chain snarls. According to Bloomberg Economics, a recession this year will be unavoidable.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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