With Fuel Rationing, Trouble Brewing In Sri Lanka

Unless the interim government delivers, Sri Lanka is going to be all at sea as there is more oil in cans and barrels than in fuel tanks of cars in the country currently.

Government servants are asked to stay at home, private sector employees are told to work from home, students are again online, and tugs and racketeers are having a good time due to non-existent fuel supplies in the country. Many Sri Lankans have been detained as they are trying to flee the crisis-hit island nation by the sea.

Speaker Mahinda Yapa Abeywardena said June 28 that the Parliament will not be able to meet till next week due to the disruption of fuel supply.

The United Nations has already pressed the panic button by putting out an appeal for $47 million for life-saving aid. Since the end of 2021, many families are skipping meals, eating less, or limiting portion sizes, the UN observed.

Aggravating the economic woes are the fears of starvation and food insecurity amidst the fuel shortage. According to Reuters, the country is down to just 15,000 tons of fuel to keep essential services running.

On June 27, Sri Lanka suspended nationwide fuel sales for nearly a fortnight as the country is left with only enough fuel to last about a week. However, essential services like ports, airports, health, food distribution and agriculture are excluded by the ban until July 10, after which the government has vowed to make the supply steady.

Sri Lanka is mainly knocking on the doors of its neighbor India, which has so far extended nearly $4 billion in assistance to tide over the energy crisis.

Wickremesinghe has said that the country is expecting another credit line worth $500 million from India for fuel imports.

Sri Lanka is expecting a government-ordered petrol shipment on July 22, and India's state-owned Indian Oil Corporation is planning a shipment of petrol and diesel around July 13.

The government is also looking to the Middle East and Russia to get more fuel.

Energy Minister Kanchana Wijesekera has already met his Qatari counterpart and the chief executive of Qatar Energy. A top-level team will travel to Russia soon to seal lucrative energy deals.

The plan is to allow foreign firms to distribute fuel to ease the shortages, Energy Minister Kanchana Wijesekera said June 27.

According to President Gotabaya Rajapaksa, the World Bank has agreed to restructure 17 projects it is funding in the country. An International Monetary Fund (IMF) team has initiated talks on a $3 billion bailout package.

The government has started talks with bilateral creditors such as India and China to secure fresh funds to pay for imports.

There are several nations that have come forward to assist Sri Lanka within the IMF framework. Australia has already pledged A$ 50 million and the US $12 million in assistance. Britain, Sri Lanka's former colonial master, is promising support.

The pertinent question is whether the Ranil Wickremesinghe government would be able to manage this assistance properly and prudently.

Without any plan for rescue, the six-week-old Wickremesinghe government has proved ineffective. It, on the other hand, has triggered the prospect of further unrest in the South Asian nation.

The interim government has not lived up to expectations and has earned notoriety for its callous disregard for the woes of 22 million people. However, the caretaker government has managed to give the powerful Rajapaksas the major reprieve they desperately needed.

The government is yet to recover from the negative impact of the $51 billion foreign debt default in April. The cash-strapped country owes $7 billion to foreign buyers this year. The import-reliant nation's total debt is estimated to be over $50 billion.

The unrest in the country over shortages of food and medicine brought a change in government last month after claiming nine lives and injuring 300 people.

Angry people are more dangerous when hungry.