‘Sri Lanka’s fuel, gas shortages set to ease’

COLOMBO: Sri Lanka’s central bank has secured foreign exchange to pay for fuel and cooking gas shipments that will ease crippling shortages, its governor said yesterday, as the prime minister said supplies had been locked in for at least a month.

Most of Sri Lanka’s petrol stations have run dry as the island nation battles its most devastating economic crisis since independence in 1948.

At some pumps in the commercial capital here, dozens of people stood in lines holding plastic jerry cans, as troops in combat gear and armed with assault rifles patrolled the streets. Traffic was extremely light.

Residents said most people were staying at home because of the lack of transport.

Central bank Governor P. Nandalal Weerasinghe said adequate dollars had been released to pay for fuel and cooking gas shipments, utilising in part US$130 million received from the World Bank and remittances from Sri Lankans working overseas.

He was speaking after the central bank held interest rates steady at a policy meeting, citing a massive seven percentage point increase in April that it said was working its way through the system.

The country was more politically and economically stable, Weerasinghe said, adding that he would stay on in his post.

He said on May 11 he would resign in two weeks in the absence of political stability as any steps the bank took to address the economic crisis would not be successful amid turmoil.

Ranil Wickremesinghe, an opposition parliamentarian, was named prime minister last week and he has made four cabinet appointments. However, he has yet to name a finance minister.

Inflation could rise further to a staggering 40 per cent in the next couple of months but it was being driven largely by supply-side pressures and measures by the bank and government were already reining in demand-side inflation, the central bank governor added.

Inflation hit 29.8 per cent in April with food prices expanding 46.6 per cent year-on-year.