Thousands queued for cooking gas and petrol in Sri Lanka’s commercial capital on Friday and Prime Minister Ranil Wickremesinghe warned of food shortages as the island nation grapples with a devastating economic crisis.
Lines formed in many parts of Colombo, a city of about 900,000 people, as residents tried to stock up on fuel, which is mostly imported and in extremely short supply with the government running out of foreign currency.
“Only about 200 cylinders were distributed, though there were around 500 people,” said Mohammad Shajli, a part-time driver who queued for the third day hoping to buy cooking gas for his family of five. Hundreds of others were queuing, they had empty cylinders.
“Without gas, without kerosene, we cannot do anything,” Shazali said. “What’s the last option? Without food we’re going to die. It’ll be one hundred percent.”
Tourism-dependent Sri Lanka, where India and China struggle for influence, is facing severe shortages of foreign exchange, fuel and medicines, and economic activity has slowed.
Public transport has come to an end and traffic is light as most people are staying at home due to shortage of petrol.
Wickremesinghe, warning of a food crisis, vowed to increase productivity for the next planting season and buy enough fertilizer to meet the food demand of its 22 million population.
President Gotabaya Rajapaksa’s decision to ban all chemical fertilizers in April last year resulted in huge crop yield cuts and although the government has reversed the ban, there have been no major imports.
“Despite not being the time to get fertilizers for Yala (May-August) season, steps are being taken to ensure adequate stock for the Maha (September-March) season,” the Prime Minister said in a message on Twitter of late. are.” Thursday.
“I sincerely urge everyone … to accept the gravity of the situation.”
Japan, which has longstanding economic ties with the island, said it would provide a $3 million emergency grant for medicine and food, its foreign ministry said.
When a truck arrived at a LPG distribution center with fresh supplies, soldiers with automatic rifles guarded the vehicle while those in the queue applauded.
State-run Litro Gas is hoping to start distributing 80,000 cylinders a day by Saturday but will have to scramble to meet an estimated 3.5 million cylinder shortfall in the market, chairman Vijeta Herath told Reuters.
The government has also invited tenders to buy cooking gas worth $120 million from India under a massive $1 billion line of credit.
However, along with cooking gas, the prices of food and other essential commodities have increased.
The price of a 12.5 kg LPG cylinder has increased from Rs 2,675 in April to around Rs 5,000 ($14).
‘Can’t even be here’
“There is no point in talking about how difficult life is,” said APD Sumanavati, a 60-year-old woman selling fruits and vegetables at Petta market in Colombo. “I can’t predict how things will be in two months, at this rate we won’t even be here.”
The bank has said that inflation may rise to 40% in the next few months, but this was mainly driven by supply-side pressures and measures by the central bank and the government to rein in demand-side inflation, the bank has said. .
Inflation hit 29.8% in April and food prices rose by 46.6% year-on-year.
As anger against the government spread, police fired tear gas and water cannons to disperse hundreds of student protesters in Colombo on Thursday. The protesters are demanding the removal of the President and the Prime Minister.
The economic crisis has been compounded by the confluence of tourism, rising oil prices and populist tax cuts of the COVID-19 pandemic by the government of President Rajapaksa and his brother Mahinda who resigned as prime minister last week.
Critics accuse Wickremesinghe of being appointed Prime Minister in his place, saying he is a puppet of the brothers, a charge he denies.
On Friday, nine new members were appointed to the cabinet, including the important ministries of health, trade and tourism. But no one has been named to lead the finance ministry and lead negotiations with the International Monetary Fund for the bail-out. Wickremesinghe is likely to retain the portfolio.
An IMF spokesman said it was monitoring developments very closely and a virtual mission to Sri Lanka is expected to conclude technical talks on a possible loan program on May 24.
The Group of Seven economic powers supports efforts to provide debt relief for Sri Lanka, the group’s finance chiefs said in a draft release from a meeting in Germany on Thursday after Sri Lanka defaulted on its sovereign debt.
Central bank chief P. Nandlal Veerasinghe has said that the advisories for debt restructuring are almost finalized and he will soon submit a proposal to the cabinet.
“We are in a pre-emptive default,” he said. “Our position is very clear, unless there is debt restructuring, we cannot repay.”
($1 = 355.0000 Sri Lankan Rupee)
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(Reporting by Uditha Jaisinghe and Devjyot Ghoshal, additional reporting by Sudarshan Vardhan in New Delhi and Kantaro Komiya in Tokyo; Writing by Raju Gopalakrishnan; Editing by Chizu Nomiyama)
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