Sri Lanka shuts schools, shuts trains, buses as fuel shortages mount

Colombo, Sri Lanka will shut schools and allow fuel supplies to services deemed essential, like health, trains and buses for two weeks starting Tuesday, a minister said. The country is experiencing a severe economic crisis, with foreign exchange reserves at a record low, and the island of 22 million struggling to pay for essential imports of food, medicine and fuel.

Industries like garments, a big dollar earner in the Indian Ocean nation, are left with fuel for only about a week to 10 days. The country's stocks will exhaust in just under a week, based on regular demand, according to Reuters calculations.

Bandula Gunewardena, the spokesman for the government cabinet, told reporters that Sri Lanka will only issue fuel to trains and buses, medical services and vehicles that transport food from Tuesday to July 10, according to Bandula Gunewardena.

Schools in urban areas will be shut and everyone is encouraged to work from home, he said. Gunewardena said that Sri Lanka has never faced such a severe economic crisis in its history.

Automobile driver W. D. Shelton, 67, said he had waited four days for fuel in line.

He said I haven't slept or eaten properly during this time. We can't earn, we can't feed our families. The navy arrested 54 people off the eastern coast in the early hours of Monday after they tried to leave by boat, a spokesman said, on top of 35 boat people held last week.

After clashes between pro- and anti-government protesters spiraled into countrywide violence that left nine dead and about 300 people injured, the elder brother of President Gotabaya Rajapaksa resigned as prime minister last month.

An escalation of the fuel shortage could lead to a new wave of demonstrations.

The opposition leader Sajith Premadasa called for the government to step down.

He said the country has collapsed completely due to the fuel shortage. The government has lied repeatedly to the people and has no plan on how to move forward. The power minister said on Sunday that the fuel stockpile has 9,000 tons of diesel and 6,000 tons of petrol, but no fresh shipments are due.

The Lanka IOC, a local unit of Indian Oil Corporation, said it had 22,000 tons of diesel and 7,500 tons of petrol and was expecting another 30,000 tons shipment of petrol and diesel around July 13.

Sri Lanka consumes about 5,000 tons of diesel and 3,000 tons of petrol a day to meet its transport requirements, according to Lanka IOC chief Manoj Gupta.

According to the data released on Monday, the biggest consumers are industries like apparel and textiles companies whose exports jumped 30% to $482.7 million in May.

Yohan Lawrence, secretary general of the Sri Lanka Joint Apparel Associations Forum, said we have enough fuel for the next seven to 10 days.

We are watching and waiting to see if fresh fuel stocks arrive and what will happen in the coming days. Sri Lanka's power regulator said the country was using its last stocks of furnace oil to run multiple thermal power plants and keep power cuts to a minimum. Power cuts will increase to three hours from Monday from two and a half hours earlier in the day.

The power cuts are going to be kept at three to four hours a day for the next two months, according to Janaka Ratnayake, chairman of the Public Utilities Commission of Sri Lanka. This could change given the situation of the country. An IMF team is in Sri Lanka for talks on a $3 billion bailout package. The country hopes to reach a staff-level agreement before the visit ends on Thursday, but that is unlikely to unlock any immediate funds.

The United States has agreed to provide technical assistance to fiscal management, and has received $4 billion in financial assistance from India and the Sri Lankan government.