By Nasriya Naffin, TON Sri Lanka

In the near past, the Sri Lankan cabinet granted permission for fuel import and retail sales to companies from oil exporting nations as the country has been halted for two weeks by the government with no sufficient fuel to run the nation. Schools have been closed and millions of people have been requested to work from home as both private and public transportation is finding it difficult to provide their service. The step was important to overcome fuel crisis.

According to the government statements, the country has only fuel to run the country just for a day under its regular demand. Fuel supply has been restricted only to essential services by the government. However, the Indian Oil Company (IOC) has been supplying fuel at their fuel stations on a regular basis but due to high demand and limited amount of fuel, fuel stations owned by IOC have never ending vehicle queues near them. According to local media daily clashes have been reported near these fuel stations among the public waiting in lines for days.  

Minister of Energy Kanchana Wijesekera said, companies will be selected based on their ability to import fuel and operate without FOREX requirements from the central bank of Sri Lanka and other banks for the first few months. Ceylon Petroleum Corporation will remain as the service provider for logistics, stocking and distribution with a service fee charged from the companies. Out of 1190 outlets from CEYPETCO few will be given and a few more new outlets will be opened for these new companies. The country's refinery will remain under CEYPETCO.  

Currently there is no confirmed fuel shipment that is said to arrive for the coming week and very soon the public transport will completely stop and the country may need to extend power cuts if there is a shortage in fuel for the power plants.

The island nation is facing its worst economic crisis since independence in 1948 resulting in acute shortages of food, fuel, medicine and cooking gas. Transportation, distribution, education and the country's one of the largest foreign income generator-- tourism sectors has been hit hard. Most of the industries are suffering due to daily power outages and shortage of fuel. It has become difficult to distribute essential food items and medicines throughout the country. Patients and the medical staff find it difficult to reach a hospital when it is an emergency.

Aviation industry has been affected too with fuel shortage; State run Sri Lankan airlines has cut down its schedules already. Schools have been closed for longer period of time after the pandemic. The online education system has not shown any success during the pandemic, especially in rural parts of the country where buying a smart phone and having access to internet is difficult for many children.

Fisheries industry on the other hand has also been severely affected by the fuel shortage. Many fishermen have not got fuel for their boats. There's a massive scarcity of fish in the market and fish prices have gone up drastically that many people have stopped consuming fish as they cannot afford it anymore.   

According to the energy minister, finding money for fuel is the problem and it has become the huge challenge. India was supplying most of the country's fuel needs recently by a credit line. Last week India has sought payment in advance for their future fuel supplies as Sri Lanka has run completely out of its dollar reserves. The island nation has requested for an approval of a fresh credit line of USD 500 million for its fuel purchases.  

Sri Lanka has already sent its representatives to Qatar and Malaysia to discuss the present fuel shortage and get some assistance. They have even started discussions with Russia in this regard.  Meanwhile, representatives of a Russian oil company arrived at Colombo last week to negotiate an agreement for oil supply after a telephone conversation held between the heads of the countries. Russia may enter the oil distribution market in Sri Lanka as they face many sanctions from the western world.

The country may also look into possible trade agreements and it will be a good opportunity for Sri Lanka to boost its tourism once again for Russians. Russians were contributing a lot for Sri Lankan tourism especially during and after the pandemic until the Ukrainian war started.

Public anger worsens at the government of the country. The government says that it needs to print money to settle employees' salaries as they are out of funds. This action may lead to further price hikes and cause further inflation. The existing youth unrest has been mounting and resulted in a mass of protestors storming into the president’s official residence, The Temple Trees, and the old Parliament building demanding President Gotabaya Rajapaksa and Prime minister Ranil Wickramasinghe to step down on the 9^th of July the situation in Sri Lanka has become unstable as the president has fled the country, and has appointed the prime minister as the acting president. Sri Lanka is currently working on political stability, debt sustainability and debt restructuring to continue further discussions with the International Monetary Fund for a bailout package of USD 3 billion. It is high time that the new leadership including Sajith Premadasa should come forward to stabilize the country.