SL's economy struggles amid fuel crisis
Sri Lanka’s main industries were queuing up for fuel, running from pillar to post and even resorting to meetings with government bigwigs as they struggled to make ends meet this week facing the worst of the economic crisis. But Finance Minister has assured good news from March 5.
Finance Minister Basil Rajapakse on Wednesday met tourism industry stakeholders and announced his plans assuring no electricity disruptions from March 5, Tourist Hotels Association President M. Shanthikumar told the Business Times.
He told industry representatives that there will not be any electricity interruptions after March 5 and requested them to forward their details to the Ceylon Electricity Board (CEB) to be exempted from any further electricity disruptions to their hotels.
Tourism
Minister Rajapakse said tourist coaches could obtain fuel to transport tourists from the Sri Lanka Transport Board depots on a payment. By Thursday evening the Tourism Ministry
Secretary had requested the same from the Transport Ministry.
All these crises compounded the fragile industry that according to Mr. Shanthikumar was experiencing about 70 per cent cancellations from the Eastern
European market due to Russia’s invasion of Ukraine.
Reports of the economic crisis in Sri Lanka have reached global tour operators who are now worried about sending tourists to holiday here.
NKar Travels Managing
Director Nilmin Nanayakkara pointed out that they are struggling with no diesel and are coping with help. While tourists are aware of the crisis the industry wants to make sure they are not impacted so “we are somehow borrowing, pleading and managing it.”
Others are seeking divine intervention as the crisis has clearly deepened to a very grave level as some in the industry don’t want to talk to English newspapers fearing the message will reach the international readers and “that will stop those who are coming into the country as well,” as one hotelier said.
Exports
Joint Apparel Association Forum ( JAAF) Secretary General Yohan Lawrence told the Business Times electricity interruptions have not yet caused delays but if the situation is not resolved “we will see major problems by next week.”
At the moment there are a few isolated incidents of lack of staff transport services; but discussions are going on at all levels at present to resolve the matter, he said.
FTZ Manufactures Association Secretary Dhammika Fernando said that only Biyagama and Katunayake zones were exempted from electricity interruptions and this is causing severe adverse impacts on export orders that could
result in a US$2.5 billion loss in revenue from the zones. Total income from the export zones is US$8 billion and total industrial earnings from the entire country are US$11 billion.
Companies are said to be curtailing their operations and shutting down plants for a certain number of hours a day and others are finding it hard to bring down workers to the factories as there is a lack of fuel for these buses as well, it was noted.
At least two big investors have pulled out operations ever since the dollar crisis came about late last year, Mr. Fernando said adding that others are now contemplating moving out operations to countries like Myanmar, Thailand and India.
Meanwhile exporters are also saddled with issues in transporting goods between the Colombo Port and the factories.
Transport
Today container transport operators directly involved in the import/ export sector are waiting in queues at petrol stations as fuel is rationed out for Rs.3000 which is not sufficient to ply between Welisara and the Colombo Port and back, United Lanka Container Transport Owners Association President Sanath K. Manjula told the Business Times.
As a result in a sector that has about 6000 operating vehicles, 75 per cent are not operating due to the shortage of diesel by Thursday evening.
“Priority needs to be given to these vehicles as we transport goods for export that bring in the dollars, and at the same time we bring in imported goods into the country like foods, pharmaceuticals, and others,” he asserted.
At present only 25 litres is being allocated at petrol stations per vehicle but this is not sufficient as one container vehicle requires at least 200- 300 litres for a full tank, he noted.
As a result the container operators are now trying to limit their operations outside of the Western Province, Mr. Manjula said.
He noted that they sought assistance from the Sri Lanka Ports Authority Chairman but were turned down. Then they turned to Ports Minister Rohitha Abeygunawardena who assured he would take up the matter with the Finance Minister; but there was no response even by Thursday. The Customs Department Director General was contacted but to no avail. “If we are compelled to stall our operations it could lead to a shortage of all essential items entering the country,” he said.
Agriculture
Regional Plantation Companies’ estates have fuel for about a week or two which is now getting depleted, Planters Association Spokesman Dr. Roshan Rajadurai said.
As a result with no fuel, trucks will not be able to bring in the firewood and manufactured tea cannot go down to Colombo.
Even the Maha harvest is being delayed as farmers are unable to purchase fuel for their tractors and harvester machines.
All Island Farmers Association Convenor Namal Karunaratne said the farmers were unable to reap their harvest as they are chased out of petrol stations as diesel is not allowed to be sold in cans resulting in violent outbursts with the petrol station staff.
All sectors are hoping for some consolation to the current crisis and want to believe in the March 5 promise. But almost everyone told the Business Times that they are simply not sure the government can deliver on this promise considering the country’s financial crisis and since authorities are found to repeatedly backtrack on their commitments.