Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Thousands queue for petrol, gas in Sri Lanka amid warnings of food shortages

Economy May 20, 2022 21:03
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. FILE PHOTO: Protestors stand on a water cannon vehicle as they shout slogans during a protest organised by students near the President's House, amid the country's economic crisis, in Colombo, Sri Lanka, May 19, 2022. REUTERS/Adnan Abidi/File Photo 2/3

By Devjyot Ghoshal and Uditha Jayasinghe

COLOMBO (Reuters) - Thousands of people queued for cooking gas and petrol in Sri Lanka's commercial capital on Friday and Prime Minister Ranil Wickremesinghe warned of a food shortage as the island nation battles a devastating economic crisis.

Lines formed in many parts of Colombo, a city of around 900,000 people, as residents tried to stock up on fuel, which is mostly imported and is in extremely short supply with the government running out of foreign exchange.

"Only about 200 cylinders were delivered, even though there were about 500 people," said Mohammad Shazly, a part-time chauffeur in a queue for the third day in the hope of procuring cooking gas for his family of five. Hundreds of others were in line, with empty cylinders by their side.

"Without gas, without kerosene oil, we can't do anything," Shazly said. "Last option what? Without food we are going to die. That will happen hundred percent."

Tourism-dependent Sri Lanka, where India and China jostle for influence, is facing a dire shortage of foreign exchange, fuel and medicines, and economic activity has slowed to a crawl.

Public transport is depleted and traffic is light as most people are staying at home because of the scarcity of petrol.

Wickremesinghe, warning also of a food crunch, vowed to buy enough fertiliser for the next planting season to boost productivity and meet the food demand of its 22 million population.

A decision in April last year by President Gotabaya Rajapaksa to ban all chemical fertilisers drastically cut crop yields and although the government has reversed the ban, no substantial imports have yet taken place.

"While there may not be time to obtain fertiliser for this Yala (May-August) season, steps are being taken to ensure adequate stocks for the Maha (September-March) season," the prime minister said in a message on Twitter (NYSE:TWTR) late on Thursday.

"I sincerely urge everyone to accept the gravity of the ... situation."

Japan, which has long-standing economic ties with the island, said it would provide an emergency grant of $3 million for medicine and food, its foreign ministry said.

When a truck arrived at a cooking gas distribution centre with fresh supplies, soldiers with automatic rifles guarded the vehicle while people in the queue applauded.

State-run Litro Gas is hoping to start distributing 80,000 cylinders a day by Saturday but has to scramble to fill an estimated 3.5 million cylinder shortage in the market, Chairman Vijitha Herath told Reuters.

The government has also called for tenders to procure $120 million worth of cooking gas under a larger $1 billion credit line from India.

However prices have surged, for cooking gas as well as food and other essentials.

The price of a 12.5-kg cooking gas cylinder has soared to nearly 5,000 rupees ($14) from 2,675 rupees in April.

'MIGHT NOT EVEN BE HERE'

"There is no point in talking about how hard life is," said A.P.D. Sumanavathi, a 60-year-old woman selling fruit and vegetables in Colombo's Pettah market. "I can't predict how things will be in two months, at this rate we might not even be here."

Inflation could rise to a staggering 40% in the next couple of months but it was being driven largely by supply-side pressures and measures by the central bank and government were already reining in demand-side inflation, the bank has said.

Inflation hit 29.8% in April with food prices up 46.6% year-on-year.

As anger against the government spreads, police fired tear gas and water canon to push back hundreds of student protesters in Colombo on Thursday. The protesters are demanding the ouster of the president as well as the prime minister.

The economic crisis has come from the confluence of the COVID-19 pandemic battering tourism, rising oil prices and populist tax cuts by the government of President Rajapaksa and his brother, Mahinda, who resigned as prime minister last week.

Critics accuse Wickremesinghe, appointed prime minister in his place, of being a stooge of the brothers, an accusation he denies.

Nine new members were appointed to the cabinet on Friday, including to the critical health, trade and tourism ministries. But no one has been named to head the finance ministry and lead negotiations with International Monetary Fund for a bail-out. The portfolio is likely to be retained by Wickremesinghe.

A spokesperson for the IMF said it was monitoring developments very closely and that a virtual mission to Sri Lanka was expected to conclude technical talks on a possible loan programme on May 24.

The Group of Seven economic powers supports efforts to provide debt relief for Sri Lanka, group finance chiefs said on Thursday in a draft communique from a meeting in Germany after Sri Lanka defaulted on its sovereign debt.

Central bank chief P. Nandalal Weerasinghe has said advisers for undertaking debt restructuring were almost finalised and he would be submitting a proposal to the cabinet soon.

"We are in pre-emptive default," he said. "Our position is very clear, until there is a debt restructure, we cannot repay."

($1 = 355.0000 Sri Lankan rupees)

Thousands queue for petrol, gas in Sri Lanka amid warnings of food shortages
 

Related Articles

SAS and its pilots extend wage talks until Monday
SAS and its pilots extend wage talks until Monday By Reuters - Jul 02, 2022

STOCKHOLM (Reuters) -Scandinavian airline SAS and its pilots have agreed to extend their wage talks until Monday in the hope of averting a strike, a company executive told...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email