Bankrupt Sri Lanka seeks cut price Russian oil – Reuters
Cash-strapped Sri Lanka on Sunday announced it was sending ministers to Russia and Qatar to try to get cheap oil a day after the government said it was running out of fuel .
The government has meanwhile extended until further notice the two-week closure of non-essential public institutions to save fuel, keeping only skeletal staff to provide minimal services.
Energy Minister Kanchana Wijesekera said two ministers would visit Russia on Monday to discuss securing more oil after last month’s purchase of 90,000 tonnes of Siberian crude.
The shipment was organized by Coral Energy, a Dubai-based middleman, but politicians have urged authorities to negotiate directly with President Vladimir Putin’s government.
“Two ministers are going to Russia and I will go to Qatar tomorrow to see if we can arrange favorable terms,” Wijesekera told reporters in Colombo.
Wijesekera had announced on Saturday that Sri Lanka had practically run out of petrol and diesel after several planned shipments were delayed indefinitely for “banking” reasons.
Fuel reserves were sufficient to meet demand for less than two days and were reserved for essential services, Wijesekera said while apologizing for the situation.
State-owned Ceylon Petroleum Corporation on Sunday raised the price of diesel by 15% to 460 rupees ($1.27) a liter and gasoline by 22% to 550 rupees.
Since the start of the year, diesel prices have almost quadrupled and gasoline has almost tripled.
Wijesekera said there would be an indefinite delay in getting new oil shipments and urged motorists not to queue until he introduces a token system for a limited number of vehicles per day.
The United States takes stock
A delegation from the US Treasury and the US State Department has arrived in the meantime to “explore the most effective ways for the United States to support Sri Lankans in need”, the US Embassy in Colombo said.
“As Sri Lankans endure some of the greatest economic challenges in their history, our efforts to sustain economic growth and strengthen democratic institutions have never been more critical,” US Ambassador Julie Chung said in a statement.
US Deputy Assistant Secretary of the Treasury for Asia Robert Kaproth and Deputy Assistant Secretary of State for South and Central Asia Kelly Keiderling were part of the delegation.
The embassy said it had committed $158.75 million in new funding over the past two weeks to help Sri Lankans.
About 1.7 million people need “life-saving assistance”, according to the United Nations, which launched a flash appeal last week.
Four out of five people in the country of 22 million people have reduced their food consumption due to severe shortages and runaway prices, the UN noted.
Prime Minister Ranil Wickremesinghe warned Parliament on Wednesday that further difficulties were ahead.
“Our economy has faced a complete collapse,” Wickremesinghe said. “We are now facing a much more serious situation beyond just shortages of fuel, gas, electricity and food.”
Unable to repay its $51 billion foreign debt, the government declared it in default in April and is negotiating with the International Monetary Fund for a possible bailout.
Sri Lanka’s official inflation at the end of May was 45.3%, according to official data, but private economists put it at 128%, the second highest in the world after Zimbabwe.