Oil Crisis in Sri Lanka

Photo: BBC

Sevinç İrem BALCI

Sri Lanka, who has a fragile economy currently and on the edge of a bankrupt, now faces a huge oil crisis that affected everyday life of Sri Lankans severely. There are just 15,000 tons of gasoline and diesel left in the 22 million populated nation, not enough to maintain basic services for the next few days. According to the publication, Sri Lanka “will come to a full standstill starting this week as even public transit would come to a grinding halt” without any gasoline delivery.

Therefore, the Government decided on applying harsh policies on limiting the usage of oil in everyday life. One of them was the ban on non-essential petroleum sales. Only buses, trains, and vehicles required for medical services and food delivery will be permitted to refuel during the course of the following two weeks. Urban schools are closed, and the 22 million people who live there have been ordered by authorities to work from home. A large portion of the island’s population is unsure of how they will survive without gasoline. Long lines have been present at gas stations all around Sri Lanka for months.

Due to the pandemic’s severe economic impact, rising energy costs, and populist tax cuts, Sri Lanka lacks the foreign exchange needed to pay for imports of necessities. Acute shortages of food, medication, and gasoline have contributed to the country’s record-high cost of living since so many people depend on automobiles for their means of transportation. The government said on Monday that it will prohibit the purchase of gasoline and diesel for private automobiles until July 10.

The South Asian country’s energy minister, Kanchana Wijesekera, apologized on June 25 for the deepening gasoline crisis and said that some anticipated shipments were encountering unforeseen delays. According to an AFP report, Sri Lanka is almost out of gasoline and fuel. According to the minister, oil shipments that were supposed to arrive last week did not, and those that are supposed to arrive the next week will also not, due to “banking and logistical issues.” He continued by saying that the island’s state-run Ceylon Petroleum Corporation (CPC) is unable to forecast when fresh supplies of oil will come.

The CPC also shut down its lone refinery as a result of a shortage of crude oil, he stated. The refinery started up earlier this month using 90,000 tonnes of Russian crude oil that was obtained on a two-month credit basis through Coral Energy in Dubai.

Over that, the administration considered to buy Russian oil and get in touch with Russian officials. “Two ministers are going to Russia and I will go to Qatar tomorrow to see if we can arrange concessionary terms,” Wijesekera told reporters in Colombo on Sunday. The ministers will discuss on whether Sri Lanka can buy cheaper oil from them.

And most recently, the President of Sri Lanka, Gotabaya Rajapaksa, spoke with his counterpart in Russia, Vladimir Putin, to discuss alternatives for buying oil from Moscow as Colombo attempts to restock its fuel supplies amid an unexpected economic crisis.

It would be not easy for Sri Lanka to recover from this economic and oil crisis, as should be remembered Sri Lanka has received aids from India. Maybe in this situation, New Delhi could support more deeply to the country neighboring in the South.

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