Sri Lanka faces fuel shortage, essential food, medicine

The country is suffering from a severe economic crisis, with foreign exchange reserves at a record low and the island of 22 million struggling to pay for essential food, medicine and fuel for two weeks starting Tuesday, and will be shut down in Colombo, Sri Lanka.

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 current stocks will be exhausted in less than 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 beginning Tuesday until July 10, according to Bandula Gunewardena.

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

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

He said that 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 as they tried to leave by boat, on top of 35 boat people held last week, a spokesman said.

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.

Opposition leader Sajith Premadasa called for the government to step down.

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

The Lanka IOC, which has 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 just to meet its transport requirements, according to Lanka's IOC chief Manoj Gupta.

According to 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 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. The power cuts will go up to three hours from Monday from two and a half hours earlier in the day.

The power cuts will be at three to four hours for the next two months, said 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 is hoping to reach a staff-level agreement before the visit ends on Thursday, but that is unlikely to unlock any immediate funds.

The US has agreed to provide technical assistance for fiscal management, as part of the $4 billion in financial assistance from India and the Sri Lankan government.