Sri Lanka Updates: Due to the country’s worst economic crisis in decades, Sri Lanka has stopped supplying gasoline for non-essential vehicles.
Only buses, trains, and vehicles intended to deliver food and medical supplies will be permitted to refuel for the next two weeks.
Urban schools were closed, and authorities have ordered the 22 million people who live there to work from home.
The South Asian country is negotiating a bailout arrangement because it finds it difficult to pay for imports like petrol and food.
Since the 1970s oil crisis, when petrol was rationed in the US and Europe and speed limits were enforced to curb demand, Sri Lanka is the first country to pursue the drastic measure of suspending sales of fuel to average citizens, according to Nathan Piper, head of oil and gas research at Investec.
The embargo, according to him, brought Sri Lanka’s meagre foreign exchange reserves and the steep rise in oil prices to light.
On the island, many people are unsure of how they will get by without fuel In recent months, there have been protracted lines at gas stations all around Sri Lanka.
Chinthaka Kumara, a 29-year-old cab driver from Colombo, thought the ban would “create more issues for customers.”
“I work daily for a living. I’ve waited in line for three days and have no idea when we will receive gasoline “He spoke Sinhala to BBC.
Drivers are currently being requested to leave, and tokens are being handed out to ration the limited fuel supplies. While some people were able to stay in line, others couldn’t.
AN “EXTREME ECONOMIC CRISIS”:
Sri Lanka lacks the foreign currency required to pay for imports of necessities because of the pandemic’s severe economic impact, rising energy prices, and populist tax cuts.
Because so many people rely on cars as a form of mobility, acute shortages of food, medicine, and gasoline have contributed to the nation’s record-high cost of living.
The government said on Monday that until July 10 it would forbid the purchase of gasoline and diesel for personal vehicles.
A representative for the administration named Bandula Gunewardena asserted that Sri Lanka has “never seen such a terrible economic crisis in its history.”
The cash-strapped government has also dispatched delegates to Qatar and Russia, two of the major energy producers in the world, in an effort to assure affordable oil supplies.
Only 9,000 tonnes of fuel and 6,000 tonnes of gasoline, according to officials, are available in the country to power key services for the next few days.
It has been estimated that the stockpiles will run out in less than a week if demand is typical.
We are doing everything we can to get additional stockpiles, but we don’t know when that will happen, said Kanchana Wijesekera, minister of electricity and energy, to reporters on Sunday.
Fuel limitations, according to senior economist Alex Holmes at Oxford Economics, are “yet another little symptom of a growing crisis.”
Mobility appears to have already been severely constrained given the [long] queues of people waiting for fuel.
However, a total ban on private vehicles goes a step further and will make the economic situation worse “Added he.
For the first time in its history, the nation went into default on its debts to foreign lenders in May.
That came after weeks of demonstrations against the administration of President Gotabaya Rajapaksa.
Though his brother Mahinda resigned from his position as prime minister, the president is still being urged to step down.
An IMF delegation visited Sri Lanka last week to hold discussions about a $3 billion (£2.4 billion) bailout package.
The administration is also asking China and India for assistance so that it can import supplies.
Ranil Wickremesinghe, the country’s new prime minister, stated earlier this month that the nation needs at least $5 billion over the upcoming six months to pay for necessities like food, petrol, and fertiliser.
Amid worries about a scarcity, ministers have also recently urged farmers to increase their rice production and granted government employees an extra day off each week to help with food production.
The Covid epidemic, which has an impact on Sri Lanka’s top source of foreign exchange, the tourist industry, is to blame for the problem, according to the administration.
However, a lot of analysts claim that poor management is what really caused the economic catastrophe.
Following years in which it imported significantly more than it exported and piled up substantial debts with China on contentious infrastructure projects, Sri Lanka’s foreign exchange reserves decreased to nearly nothing.
Early in 2021, as a result of severe money shortages in Sri Lanka, the government banned the import of chemical fertilisers and instructed farmers to use organic fertilisers made in-country as a substitute.
Crop failure was widespread as a result. Sri Lanka had to import food to supplement its domestic supplies, which made the country’s lack of foreign cash worse.