Sri Lanka Economic Crisis: Have No Money To Buy Petrol, Govt Informs Parliament

In tune with the same, the crisis-hit island nation has appealed to the citizens “not to wait in line” for fuel.

Sri Lankan Prime Minister Ranil Wickremesinghe (File Photo: AP)

New Delhi: Cash-strapped Sri Lanka on Wednesday said it does not have foreign exchange to pay for a vessel of petrol anchored in its waters for nearly two months.

In tune with the same, the crisis-hit island nation has appealed to the citizens “not to wait in line” for fuel.

Confirming that the country is facing an issue of petrol availability, Power and Energy Minister Kanchana Wijesekera told the Parliament that a vessel with petrol has been anchored in Sri Lankan waters since March 28, online portal newsfirst.lk reported, according to news agency PTI.

“We do not have US dollars to make the payment for the vessel with petrol,” Wijesekera said.

He added that another USD 53 million is due for the same vessel for a previous shipment in January 2022.

Wijesekera said the shipping company concerned has refused to release the vessel until both payments are settled.

The Power and Energy Minister said the company had agreed to release the current vessel after the due payment is made following an assurance from the Central Bank of Sri Lanka to make the previous payment.

Asserting that his ministry is working towards releasing the vessel either on Wednesday or Thursday, Wijesekera said: “However, we are yet to source the fund for this purpose.”

He said this is the reason that the citizens have been requested not to wait in line for fuel.

“We apologise for this. We understand that three-wheelers can only operate with the daily fuel purchases. We appeal to the public not to remain in line for fuel on Wednesday and Thursday,” he added.

The government, however, said the nation has received sufficient stocks of diesel.

“There is no issue with diesel. But, please do not stay in line for petrol. We have limited stocks of petrol and are trying to distribute it accordingly for essential services, especially ambulances,” Wijesekera said.

The Power and Energy Minister also appealed to the people to stop stockpiling fuel, as there is no way of delivering petrol for the next two days.

He said that it would take another three days from Friday to complete the distribution of petrol to all filling stations.

Wijesekera said of the 67 proposals made to the ministry on fuel purchases, 39 were identified as practically applicable in Sri Lanka.

He added that no matter what proposal is made, the country cannot import petrol without opening the letter of credit.

A letter of credit, also known as a documentary credit or bankers’ commercial credit or letter of undertaking, is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods.

Stating Sri Lanka has received sufficient stocks of diesel, Wijesekera said: “On Tuesday, we distributed super diesel and auto diesel to all the filling stations in the country. We hope to ensure the continuous supply of diesel from today (Wednesday) to all the 1,190 active filling stations in the country, although there are 1,300 filling stations.”

The Power and Energy Minister told the House that Sri Lanka needs USD 530 million for fuel imports for June 2022.

Wijesekera noted Sri Lanka needs over USD 500 million for fuel purchases per month, compared to the USD 150 million from two years ago, even if the country receives the benefit of an Indian Credit Line.

Revealing that Sri Lanka is to make a payment of over USD 700 million for previous shipments of fuel, he said the high demand for fuel and currency depreciation can be cited as the main reasons for this.

Earlier this month, India extended its current credit line by a further USD 200 million to replenish the island nation’s rapidly depleting fuel stocks.

India has committed over USD three billion to the debt-ridden island nation in loans, credit lines and credit swaps since January this year.

Earlier on Wednesday, Sri Lankan Prime Minister Ranil Wickremesinghe told the Parliament that USD 160 million has been received from the World Bank, adding a grant from the Asian Development Bank is also expected.

However, the money received from the World Bank cannot be used to buy fuel.

“We are trying to see if we can use some of it for fuel purchases,” Wickremesinghe said.

Sri Lanka is going through the worst economic crisis since independence in 1948.