Officials in socialist Sri Lanka boasted on Thursday of having arrested 137 people for “hoarding” gasoline, diesel, and kerosene as the government struggles to purchase sufficient supplies or distribute the little it has efficiently — a crisis worsened by severe shortages of medicine and basic items like powdered milk.
The Democratic Socialist Republic of Sri Lanka is currently facing the worst economic crisis in its history, running out of nearly every basic good that citizens need for the country to function properly. Regular power cuts, water shortages, and the absence of basic food and medicine items have become commonplace in the past six months, in addition to the lack of gasoline and liquified petroleum fuel.
A combination of extreme financial mismanagement, accepting predatory loans from Communist China, “green” policies that obliterated the nation’s domestic farming industry, and nearly two decades of government capture by the powerful Rajapaksa family has left the nation destitute.
President Gotabaya Rajapaksa — the last of multiple family members in positions of power to retain his position — offered remarks on the economic disaster at a conference on Thursday. Rajapaska blamed the current crisis on global inflation and the Chinese coronavirus pandemic’s effect on Sri Lanka’s tourism industry, urging the world to offer international aid.
Local journalists in Colombo reported long lines forming at groceries on Wednesday after rumors surfaced that powdered milk had been restocked.
“People in several areas were seen queuing up on Wednesday (25) to purchase milk powder,” Sri Lanka’s News First reported. “People said that the Milk Powder sales outlet owners said that on Wednesday (25) milk powder will be sold at the shop but the shop was closed.”
Locals waited in line for hours, the outlet noted, “but NO sales were made during the entire day.”
Gasoline stations also attracted long lines in the capital, the Daily Mirror reported, despite the government’s attempts to lower demand for fuel by raising prices. Gas stations nationwide are rationing how much each individual will be able to purchase upon the restoration of any supply of gasoline in the country. Prime Minister Ramil Wickremesinghe announced on May 16 that Sri Lanka had entirely run out of fuel.
“Early this morning, the Ceylon Petroleum Corporation (CPC) has announced a fuel price hike with effect from 3.00 a.m. today. Meanwhile, Lanka IOC said it would also increase fuel prices to mirror the CPC’s rates,” Sri Lanka’s Ada Derana news outlet reported on Tuesday. “Thereby, the price of Octane 92 petrol was raised by Rs. [Sri Lankan rupee] 82 [$0.23] per litre while Octane 95 petrol went up by Rs. 77 [$0.21] per litre. The price of Auto Diesel was increased by Rs. 111 [$0.31] per litre and Super Diesel by Rs. 116 [$0.32].”
The new prices mean the cheapest gasoline in the country is now about $1.17 per liter, or about $4.43 a gallon. The prices are a significant challenge for Sri Lankan citizens, many of whom live in poverty, yet reports following the price hike indicate that long lines to refuel vehicles persist.
The rationing rules allow citizens to purchase only 10,000 rupees per car, or about 24 gallons of the cheapest gasoline, during one visit to the gas station.
Sri Lanka’s Minister of Power and Energy Kanchana Wijesekara announced on Thursday that police had conducted over 400 raids to seize “illegal” private stockpiles of gasoline and other vehicle fuels, namely diesel and kerosene. News First reported that police arrested 137 people and seized 27,000 liters of gasoline, 20,000 liters of diesel fuel, and 10,000 liters of kerosene.
“They [government officials] said raids were carried out following complaints received by the police that some individuals were collecting stocks of fuel released to fuel stations in various ways and selling them at higher prices,” the Daily Mirror reported.
The reports did not indicate that Wijesekara or Sri Lankan police indicated when, or if, the government would allow the release of the seized fuel to gas stations for public consumption. Redistributing the fuel products will likely be a challenge if the government chooses to do so, as fuel distributors protest that the government has not offered an efficient way to bring gasoline to gas stations, and ongoing protests against Rajapaksa’s government have shut down dozens of gas stations.
Sri Lanka’s Fuel Distributors’ Association announced on Thursday that it simply would not be able to restock any diesel in the country through Saturday.
“A spokesman from the association told the Daily Mirror that nearly 6,000 MT of diesel is required for daily consumption, but currently it stands at approximately 2,400 MT,” the newspaper reported. “However, with the current situation, diesel is provided to the Railway Department, Sri Lanka Transport Board (SLTB), armed forces and other essential services, and nearly 500MT of diesel is being distributed to the fuel sheds around the country, he said.”
The spokesman protested that the distribution of fuel remains uneven, so some filling stations are overwhelmed with supply while others receive next to nothing.
Fuel distributors also complain that attacks and violence related to the shortages and political turmoil limit their ability to ship the little fuel the country has in stock.
Wickremesinghe, who recently replaced the president’s brother, Mahinda Rajapaksa, as prime minister, warned this month the next two months would be “the most difficult ones of our lives” for Sri Lankans.
“We have run out of petrol. … At the moment, we only have petrol stocks for a single day,” Wickremesinghe said on May 16.
Sri Lanka has since received a moderate supply of fuel, but has no long-term plan to remedy the situation, as Wickremesinghe noted the country also ran out of cash to pay for more gasoline or to pay public servants. As Sri Lanka is socialist, importing oil is a government responsibility and Sri Lanka has been unable to rely on any help from its modest private sector.
During the same May 16 address, Wickremesinghe announced that he would have to print more money, exacerbating inflation, to pay public employees and for “essential goods and services.”
President Rajapaksa issued a plea for the world to offer financial aid to Sri Lanka during Nikkei’s Future of Asia conference on Thursday.
“We have appointed a new prime minister and a cabinet of ministers with representation from multiple political parties,” Rajapaksa said, as a means of showing good faith efforts to improve the situation. “And we are fostering ongoing discussions in parliament toward forming a national consensus on the way forward.”
Rajapaksa claimed, according to News First, “that inflation has risen due to [the Chinese coronavirus] pandemic, which has crippled the tourism industry, reduced remittances from expatriate workers, created a severe financial crisis and other factors combined with the debt burden.”
The International Monetary Fund (IMF) has indicated it is seeking ways to help Sri Lanka but blamed the crisis on Rajapaksa in remarks on Thursday.
“It is breaking my heart to watch the pictures of what is happening in the country, that was once quite prosperous. It is a result of mismanagement, and therefore the most important thing to be done is to put the country back on a sound microeconomic footing,” IMF Managing Director Kristalina Georgieva said in an interview.
Prime Minister Wickremesinghe announced a raise for government workers on Thursday.
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