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Sri Lanka PM Says Country Has Run Out of Petrol, Economy 'Extremely Precarious'

FILE PHOTO: Ranil Wickremesinghe, newly appointed prime minister, arrives at a Buddhist temple after his swearing-in ceremony amid the country's economic crisis, in Colombo, Sri Lanka, May 12, 2022. REUTERS/Dinuka Liyanawatte/File Photo

FILE PHOTO: Ranil Wickremesinghe, newly appointed prime minister, arrives at a Buddhist temple after his swearing-in ceremony amid the country's economic crisis, in Colombo, Sri Lanka, May 12, 2022. REUTERS/Dinuka Liyanawatte/File Photo

Ranil Wickremesinghe said US dollars will be sourced from open markets to pay for petrol, crude, furnace oil shipments currently in Sri Lankan waters

Sri Lanka’s new Prime Minister Ranil Wickremesinghe in his first address to the nation on Monday said the country has run out of petrol, adding the economy is extremely precarious. “We have run out of petrol… At the moment, we only have petrol stocks for a single day,” the 73-year-old United National Party (UNP) leader said, explaining the island nation is unable to find dollars to finance essential imports.

A diesel shipment using an Indian credit line arrived in the country on Sunday, but is yet to be distributed across the island. “Due to the diesel shipment that arrived yesterday, the lack of diesel will be resolved to some extent. Under the Indian credit line, two more diesel shipments are due to arrive on the 18th May and 1st June. In addition, two petrol shipments are expected on 18th and 29th May,” PM Wickremesinghe said.

“For over 40 days 3 ships with crude oil and furnace oil have been anchored within the maritime zone of Sri Lanka. We are working to obtain dollars in the open market to pay for these shipments,” he added. He said a quarter of electricity in Lanka is generated through oil. Therefore, there is a possibility that the daily power outages will increase to 15 hours a day. “However, we have already obtained money to avert this crisis,” he said.

In his first televised address to the nation after becoming the Prime Minister last week, he said, US dollars will be sourced from open markets to pay for petrol, crude, and furnace oil shipments currently in Sri Lankan waters.

Warning of hardships in the coming months, Wickremesinghe said, “The next couple of months will be the most difficult ones of our lives,” adding that he has “no desire to hide the truth and to lie to the public.”

The Prime Minister also said the Sri Lankan economy is extremely precarious and Colombo must obtain USD 75 million within the next couple of days to ease the current queues for essentials. “Although the former government’s budget projected revenue of SLR 2.3 trillion, SLR 1.6 trillion is the realistic projection of this year’s revenue,” he said.

In an apparent reference to the Rajapaksa family and its former strongman Mahinda Rajapaksa, the Prime Minister said his aim is to save the crisis-hit country, and not a person, family or group. "My aim is to save the country," Prime Minister Wickremesinghe said. "I am not here to save a person, family or group."

Wickremesinghe was appointed as Sri Lanka’s 26th prime minister on Thursday days after prime minister Mahinda Rajapaksa resigned after violence erupted following an attack on the anti-government protesters by his supporters.

Updating citizens about the state of Sri Lanka’s economic crisis, Prime Minister Wickremesinghe said the government had also run out of cash to pay the 1.4 million civil servants their salaries in May, and he will turn to money printing as a last resort. “Against my own wishes, I am compelled to permit printing money in order to pay state-sector employees and to pay for essential goods and services,” he said.

“I am undertaking a dangerous challenge… I am wearing shoes with sharp nails that cannot be removed…I am accepting this challenge for our nation. My goal and dedication is not to save an individual, a family, or a party. My objective is to save all the people of this country and the future of our younger generation,” Wickremesinghe said.

He said a relief budget will be introduced to replace the 2022 Development Budget.

Privitise SriLankan Airlines

Prime Minister Wickremesinghe said he would propose to privatise SriLankan Airlines, which is making massive losses at present. SriLankan Airlines suffered a loss of Rs. 45 billion in 2021 alone. In 2022, the total loss was Rs. 372 billion, local media reported.

"Even if we privatise SriLankan Airlines, we will have to incur the losses. These losses have to be borne also by the innocent people who have never stepped inside a plane," said the Prime Minister.

Medical Crisis

Expressing concern related to the lack of medicines, the Prime Minister said, “There is a severe shortage of a number of medicines including medicine required for heart disease as well as surgical equipment. Payments have not been made for four months to suppliers of medicine, medical equipment, and food for patients. The payment owed to them amounts to SLR 34 billion.” The state had been unable to pay for medicine supplies over four months now.

“In the short term, we will have to face an even more difficult time period. There is a possibility that inflation will increase further,” he said.

Political Crisis

Thanking the opposition leader and the leaders of the political parties for replying to the letters that he sent them informing them of the current situation, he said: “We must immediately establish a national assembly or political body with the participation of all political parties to find solutions for the present crisis. This will enable us to discuss with all parties and to arrive at decisions for short-, medium-, and long-term action plans that will enable us to rebuild our nation within a specified time frame.”

Sri Lanka is going through the worst economic crisis since independence in 1948. A crippling shortage of foreign reserves has led to long queues for fuel, cooking gas and other essentials while power cuts and soaring food prices heaped misery on the people.

The economic crisis also triggered a political crisis in Sri Lanka and a demand for the resignation of the powerful Rajapaksas. President Gotabaya Rajapaksa, who has refused to quit, appointed a new Prime Minister and a young Cabinet last week which would introduce key constitutional reforms to curb his powers, amid protests over the nation's worst economic crisis that ousted his elder brother Mahinda Rajapaksa who is under protection at a naval base following violent attacks on his aides.

(With inputs from AFP, PTI)

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first published:May 16, 2022, 19:41 IST