Sri Lanka down to last day of petrol stock: PM tells crisis-hit nation

On Monday, Ranil Wickremesinghe called for patience, saying the economic crisis would get worse in coming months

Sri Lanka's new prime minister said on Monday the crisis-hit nation was down to its last day of petrol, as the country's power minister told citizens not to join the lengthy fuel queues that have galvanised weeks of anti-government protests.

Ranil Wickremesinghe, appointed prime minister on Thursday, said in an address to the nation the country urgently needed $75 million in foreign exchange to pay for essential imports.

"At the moment, we only have petrol stocks for a single day. The next couple of months will be the most difficult ones of our lives," he said.

"We must prepare ourselves to make some sacrifices and face the challenges of this period."

Two shipments of petrol and two of diesel using an Indian credit line could provide relief in the next few days, he added, but the country is also facing a shortage of 14 essential medicines.

The crisis led to widespread protests against President Gotabaya Rajapaksa and his family, culminating in the resignation of his elder brother Mahinda as prime minister last week after fighting between government supporters and protesters killed 9 people and wounded 300.

Sri Lanka, which is set to default on foreign debt and is printing money to pay local salaries, plans to sell its national airline to help stanch losses.

The government proposes to privatize Sri Lankan Airlines, Wickremesinghe said in a televised address to the nation Monday. The carrier made a loss of 45 billion rupees ($124 million) in the year ending March 2021, he said.

“It should not be that this loss has to be borne by the poorest of the poor who have not set foot in an aircraft,” Wickremesinghe said.

He said he is forced to print money to pay salaries, which will pressure the rupee. Cabinet has decided to bring a proposal to parliament to increase the treasury bill issuance limit to 4 trillion rupees from 3 trillion rupees, Wickremesinghe said, forecasting a budget deficit of 13% of gross domestic product for the year ending December 2022.

The nation’s dollar bonds edged higher on Monday, though they remained deep in distressed territory. The extra yield investors demand to hold the sovereign notes over US Treasuries narrowed 22 basis points to 37.29 percentage points, according to JPMorgan Chase & Co. data.

Sri Lankan Airlines, which the government bought back a stake in from Dubai’s Emirates in 2010, has a fleet of 25 Airbus SE planes, according data from tracker FlightRadar24. The carrier flies to destinations in Europe, the Middle East as well as South and Southeast Asia, according to FlightRadar24.

DESPERATE BID

The president replaced him with Wickremesinghe, an opposition parliamentarian who has held the post five times previously, in a desperate bid to placate protesters.

But the protesters have said they will keep up their campaign as long as Gotabaya Rajapaksa remains president. They have also labelled Wickremesinghe a stooge and criticised his appointment of four cabinet ministers, all members of the political party run by the Rajapaksa brothers.

Wickremesinghe said on Monday he took the role for the good of the country.

In Colombo, the commercial capital, long queues of auto rickshaws, the most popular means of transport in the city, lined up at gas stations in a fruitless wait for fuel.

"I have been in the queue for more than six hours," said one driver, Mohammad Ali. "We spend almost six to seven hours in the line just to get petrol."

Another driver, Mohammad Naushad, said the gas station he was waiting at had run out of fuel.

"We've been here since 7-8 a.m. in the morning and it is still not clear if they will have fuel or not," he said. "When will it come, no one knows. Is there any point in our waiting here, we also don't know."

Hit hard by the COVID-19 pandemic, rising oil prices and populist tax cuts by the Rajapaksas, the strategic Indian Ocean island nation, where China and India are battling for influence, is in the midst of a crisis unparalleled since its independence in 1948.

A chronic foreign exchange shortage has led to rampant inflation and shortages of medicine, fuel and other essentials, bringing thousands out on the streets in protest.

A diesel shipment using an Indian credit line arrived in the country on Sunday, but is yet to be distributed across the island.

"Request the public not to queue up or top up in the next three days until the 1,190 fuel station deliveries have been completed," Power Minister Kanchana Wijesekera said on Monday.

Wickremesinghe is yet to announce key ministers including the crucial post of finance minister, who will negotiate with the International Monetary Fund for badly needed financial help for the country.

Former Finance Minister Ali Sabry had held preliminary talks with the multilateral lender, but he quit along with Mahinda Rajapaksa last week.