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Sri Lanka’s business output is coming to a halt as the island nation, which is experiencing its worst financial crisis, runs out of transportation fuel and there are few signs of new supplies arriving. The government declared Friday a holiday for the public building of schools in order to reduce vehicular traffic, leaving many roads in and around Colombo deserted. Meanwhile, thousands of vehicles are parked in long lines stretching for kilometers as drivers wait for gas stations to refuel.
Kanchana Wijesekera, Minister of Power and Energy, said on Thursday that the state-run Ceylon Petroleum Corp had not received tenders for new fuel stocks because suppliers were discouraged by outstanding payments.
According to Wijesekera, the South Asian nation has approached several companies and countries for supplies, including Russia, and is hoping for approval from India for a new $500 million credit line for fuel imports.
Sri Lanka’s economic meltdown, the worst in the country’s independent history, has prompted protests across the island in recent months calling for the removal of President Gotabaya Rajapaksa and his family members from office. The clan has been blamed for decisions that have resulted in severe scarcities of everything from fuel to medicine, nearly 40% inflation, daily power outages of up to 13 hours, and a historic debt default.
According to Prime Minister Ranil Wickremesinghe, the country will require $6 billion in aid from the International Monetary Fund and other countries such as India and China to get through the next six months. Local governments are attempting to expedite bailout discussions with the IMF in order to secure additional funding.
Sri Lanka’s economy is likely to have contracted in the first quarter, owing to public protests, political instability, high commodities prices, and supply-chain snarls. According to Bloomberg Economics, an economic downturn is unavoidable this year.
