Sri Lanka’s government has been under fire over shortages in food, fuel, and other essential goods
Sri Lanka’s state-run Ceylon Petroleum Corporation (CPC) on Friday started rationing the amount of fuel available at pumps. The bankrupt country defaulted on its foreign debt payments this week, and food and energy shortages have triggered mass protests against President Gotabaya Rajapaksa’s government.
According to AFP, motorcyclists and motorists driving cars, trucks, or SUVs can only purchase 19.5 liters per transaction. Fuel can filling will be prohibited for motorcyclists.
The CPC controls around two thirds of Sri Lanka’s fuel market, with Lanka IOC – a local subsidiary of the Indian Oil Corporation – controlling the rest. AFP received confirmation from government officials that Lanka IOC was likely to follow the CPC’s lead and introduce rationing in its own stations soon.
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Asian state defaults
Filling stations across the country are running out of fuel, while cooking gas is also in short supply, with Litro Gas – Sri Lanka’s main distributor – saying it won’t have any gas available until Monday. According to reports, food has gone up fourfold in cost and people are waiting for their medicine and rice.
All of Sri Lanka’s cabinet members resigned in the beginning of this month. President Gotabaya Rajapaksa (his older brother), and Prime Minister Mahinda Rajapaksa were left to create a new government. However, protesters have continued gathering in Colombo’s capital, accusing President Gotabaya Rajapaksa of their economic woes.
Sri Lanka’s financial and humanitarian crisis was in part accelerated by the Covid-19 pandemic, as the island nation has lost revenue generated by tourism. High government spending and tax cuts then depleted state coffers, and the state’s attempts to pay off foreign bonds by increasing money printing led to skyrocketing inflation.
Additionally, Western banking sanctions on Moscow have made it difficult for Sri Lanka to export tea – a vital cash crop – to Russia, and have contributed to rising fuel prices worldwide.
With these issues piling up, Rajapaksa’s government announced on Tuesday that it would halt all payments on its foreign debt and use its dwindling foreign currency reserves to import food and fuel instead.
