Lanka IOC Provides Fuel as Government Pumps Go Dry in Sri Lanka

The Sri Lankan government had notified that fuel would be supplied only for essential services till 10 July.

Motorists wait in a queue expecting to buy fuel in Colombo, Sri Lanka on Sunday, 26 June.

(Photo: AP/PTI)

Lanka IOC, the subsidiary of Indian Oil Corporation in Sri Lanka, kept its petrol pumps running throughout Tuesday, 28 June, amid Sri Lanka's worsening fuel crisis. This is happening while government-owned petrol pumps have run dry.

On Monday, 27 June, the Sri Lankan government had announced that it was suspending the sale of fuel for non-essential services for two weeks till 10 July.

Stating that it has run out of fuel, the island nation requested both private and public sector employees to work from home.

An LIOC official said that they had issued petrol to private vehicles on Tuesday but that had to be stopped midway due to high demand.

Meanwhile, the government issued tokens to vehicles that had waited in queues for over three days. The military, which distributed the tokens, said that those vehicles would be prioritised when the state-run Ceylon Petroleum Corporation (CPC) resumed their deliveries.

Enraged citizens, waiting for fuel, have been demanding that President Gotabaya Rajapaksa resign immediately for his government's failure to tackle the fuel shortages.

So far, twelve people have died in fuel queues due to exhaustion, physical ailments, or accidents.

Since 24 June, fuel tankers have not arrived to the island nation while the CPC has said that no new orders for fuel have been placed.

'Sri Lanka To Liberalise Fuel Import': Energy Minister

On Monday, 27 June, Sri Lankan Energy Minister Kanchana Wijesekera visited Qatar to work out a credit purchase agreement with the oil state.

The Sri Lankan government is currently looking to purchase discounted oil from Russia, in a bid to desperately replenish its dwindling fuel stocks.

“Cabinet approval was granted to open up the fuel import and retail sales market to companies from oil-producing nations," Wijesekera tweeted on Tuesday.

The selection, he said, would be based on the company's ability to import without forex requirements from the Sri Lankan central bank.

The state fuel entity, Ceylon Petroleum Corporation (CPC) would be the service provider for logistics stocking and distribution.

Meanwhile, CPC informed the government on Saturday, 25 June, that there would be a delay in the arrival of fuel shipments owing to banking and logistical reasons.

What Has Caused the Fuel Crisis?

Sri Lanka's unprecedented economic crisis caused by forex shortages has fueled a severe crisis in the energy sector.

With the end of the credit line worth USD 700 million granted by India, the pumps in the country have run dry.

Meanwhile, according to the government's statistical office, the economic growth in the first quarter of this year is expected to see a minus 1.6 percent growth.

A release said fuel shortages, which had led to reduced production across all sectors, had contributed to this negative growth.

The country's acute foreign currency crisis led to a foreign debt default. The government had announced in April that it is suspending nearly USD 7 billion repayment of foreign debt due for this year, out of about USD 25 billion.

Sri Lanka's total foreign debt is now at USD 51 billion.

(With inputs from PTI.)