Crisis-hit Sri Lanka re-introduces rationing of fuel

As oil prices soar during the Russia-ukraine conflict, the island nation’s fuel stocks are running out

COLOMBO: Sri Lanka’s stateowned petroleum corporation on Thursday re-introduced fuel rationing for vehicles, as the worst economic crisis in decades roils the country with massive public protests against the government.

Ceylon Petroleum Corporation head Sumith Wijesinghe said that now motorcycles and other two-wheelers can purchase fuel up to worth Rs 2,000 per visit to a fuel station. Similarly, three-wheelers can purchase fuel worth Rs 3,000 and cars upto Rs 8,000. Mid last month, fuel rationing for vehicles was introduced and came to be later scrapped with the last hike of retail prices.

For several months, Sri Lankans have endured long lines to buy fuel, cooking gas, food and medicine, most of which come from abroad. Shortages of hard currency have also hindered imports of raw materials for manufacturing and worsened inflation, which surged to 18.7 per cent in March.

As oil prices soar during the Russia-ukraine conflict, the island nation’s fuel stocks are running out. Authorities have announced countrywide power cuts extending up to 7 1/2 hours a day because they can’t supply enough fuel to power generating stations.

Speaking in Parliament on Thursday, Energy Minister Kanchana Wijesekara said the release of diesel to the market has been limited due to energy needs as more diesel is to be given to generate electricity.

He assured that the current long lines for fuel would ease in about three days. We have an issue regarding diesel supply, the priority has to be given to supplying diesel to power plants for power generation,” he said. The daily release of 4,000 metric tonnes of diesel is now limited to 1,000-1,500 metric tonnes, he said. The government had to take a policy decision on whether queues should be reduced by supplying the available fuel consignments to filling stations or continuing rolling power interruptions of 3 hours and 20 minutes without extending them,” he said.

Sri Lanka is expecting additional credit lines from India for the purchase of fuel. India has committed more than $3 billion to debt-ridden Sri Lanka in loans, credit lines and credit swaps since January this year.

On Monday, India extended its current credit line by a further $200 million to replenish Sri Lanka’s rapidly depleting fuel stocks. Sri Lanka is on the brink of bankruptcy and has suspended payments on its foreign loans.

Its economic miseries have brought on a political crisis, with the government facing protests and a no-confidence motion in Parliament.