Sri Lanka will shut schools and only allow fuel supplies to services deemed essential like health, trains and buses for two weeks starting today, a minister said, in a desperate attempt to deal with a severe shortage. Sri Lanka is suffering its worst economic crisis, with foreign exchange reserves at a record low and the island of 22mn struggling to pay for essential imports of food, medicine and, most critically, 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. Current stocks of the country will exhaust in just under a week based on regular demand, Reuters calculations show. Sri Lanka will issue fuel only to trains and buses, medical services and vehicles that transport food starting today until July 10, Bandula Gunewardena, the spokesman for the government cabinet, told reporters. Schools in urban areas will be shut and everyone is urged to work from home, he said. Inter-provincial bus service will be limited. “Sri Lanka has never faced such a severe economic crisis in its history,” Gunewardena said. Autorickshaw driver W D Shelton, 67, said he had waited in line for four days for fuel. “I haven’t slept or eaten properly during this time,” he said. “We can’t earn, we can’t feed our families.” The government is talks with the International Monetary Fund (IMF) on a possible bailout, but many people can’t wait that long and demand for passports has surged. The navy in the early hours of yesterday arrested 54 people off the eastern coast as they tried to leave by boat, a spokesman said, on top of 35 “boat people” held last week. Embattled President Gotabaya Rajapaksa’s elder brother resigned as prime minister last month after clashes between pro- and anti-government protesters spiralled into countrywide violence that left nine dead and about 300 people injured. An escalation of the fuel shortage could lead to a fresh wave of demonstrations. Opposition leader Sajith Premadasa called for the government to step down. “The country has collapsed completely due to the fuel shortage,” he said in a video statement. “The government has lied to the people repeatedly and has no plan on how to move forward.” The government fuel stockpile stands at about 9,000 tonnes of diesel and 6,000 tonnes of petrol, the power minister said on Sunday, but no fresh shipments are due. Lanka IOC, the local unit of Indian Oil Corporation, said it had 22,000 tonnes of diesel and 7,500 tonnes of petrol, and was expecting another 30,000 tonnes shipment of petrol and diesel combined around July 13. Sri Lanka consumes about 5,000 tonnes of diesel and 3,000 tonnes of petrol a day just to meet its transport requirements, Lanka IOC chief Manoj Gupta said. Other big consumers are industries like apparel and textiles companies, whose exports jumped 30% to $482.7mn in May, according to data released yesterday.
* Fuel stocks set to run out in days * Transport demand alone could deplete fuel stocks in about a week * Regulator hopes to keep power cuts at 3-4 hrs/daily for 2 months Sri Lanka expects to run out of fuel in days, prompting the government to close schools in Colombo and order government employees to work from home, while troops handed tokens to people lining up for petrol to keep their places in the queue. Sri Lanka is suffering its worst economic crisis in seven decades, with foreign exchange reserves at a record low and the island of 22 million struggling to pay for essential imports of food, medicine and, most critically, 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. Public transport, power generation and medical services will get priority in fuel distribution, with some rationed to ports and airports. "I have been in line for four days, I haven't slept or eaten properly during this time," said autorickshaw driver W.D. Shelton, 67, one of those who received a token meant to hold his place in the queue for when fuel becomes available. "We can't earn, we can't feed our families," added Shelton, who was 24th in line at a fuel station in the centre of Colombo, but set to stay there as he had no petrol for the journey to his home just 5 km away. The government is talks with the IMF on a possible bailout, but many people can't wait that long. The navy in the early hours of Monday arrested 54 people off the eastern coast as they tried to leave by boat, a spokesman said, on top of 35 "boat people" held last week. Embattled President Gotabaya Rajapaksa's elder brother resigned as prime minister last month after clashes between pro- and anti-government protesters spiralled into countrywide violence that left nine dead and about 300 people injured. An escalation of the fuel shortage could lead to a fresh wave of demonstrations. Opposition leader Sajith Premadasa called for the government to step down. "The country has collapsed completely due to the fuel shortage," he said in a video statement. "The government has lied to the people repeatedly and has no plan on how to move forward." The government fuel stockpile stands at about 9,000 tonnes of diesel and 6,000 tonnes of petrol, the power minister said on Sunday, but no fresh shipments are due. Lanka IOC, the local unit of Indian Oil Corporation, told Reuters it had 22,000 tonnes of diesel and 7,500 tonnes of petrol, and was expecting another 30,000 tonnes shipment of petrol and diesel combined around July 13. Sri Lanka consumes about 5,000 tonnes of diesel and 3,000 tonnes of petrol a day just to meet its transport requirements, Lanka IOC chief Manoj Gupta told Reuters. Other big consumers are industries like apparel and textiles companies, whose exports jumped 30% to $482.7 million in May, according to data released on Monday. "We have enough fuel for the next seven to ten days, so we are managing," said Yohan Lawrence, secretary general of the Sri Lanka Joint Apparel Associations Forum. "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. Scheduled power cuts will rise to three hours from Monday from two and a half hours earlier. "We are hoping to keep power cuts at three to four hours for the next two months," said Janaka Ratnayake, chairman of the Public Utilities Commission of Sri Lanka. "But given the situation of the country this could change." The government has told employees to work from home until further notice, while schools have been shut for a week in the commercial capital of Colombo and surrounding areas. Fuel station queues have grown rapidly since last week. A team from the International Monetary Fund is visiting 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, that is unlikely to unlock any immediate funds. It has received about $4 billion in financial assistance from India and the Sri Lankan government said on Monday the United States had agreed to provide technical assistance for its fiscal management.
Cash-strapped Sri Lanka yesterday announced sending ministers to Russia and Qatar to try and secure cheap oil a day after the government said it had all but run out of fuel. The government meanwhile extended a two-week closure of non-essential state institutions until further notice in order to save fuel, maintaining only a skeleton staff to provide minimum services. Energy Minister Kanchana Wijesekera said two ministers will travel to Russia today to discuss getting more oil following last month’s purchase of 90,000 tonnes of Siberian crude. That shipment was arranged through Coral Energy, a Dubai-based intermediary, but politicians have been urging the authorities to negotiate directly with President Vladimir Putin’s government. “Two ministers are going to Russia and I will go to Qatar to see if we can arrange concessionary terms,” Wijesekera told reporters in Colombo. Wijesekera had announced on Saturday that Sri Lanka was virtually out of petrol and diesel after several scheduled shipments were delayed indefinitely due to “banking” reasons. Fuel reserves were sufficient to meet less than two days’ demand and it was being reserved for essential services, Wijesekera said while apologising for the situation. The state-run Ceylon Petroleum Corporation yesterday hiked the price for diesel by 15% to Rs460 ($1.27) a litre and petrol by 22% to Rs550. Since the beginning of the year, diesel prices have gone up nearly four-fold and gasoline has almost tripled. Wijesekera said there would be an indefinite delay in getting new shipments of oil and urged motorists not to queue up until he introduces a token system to a limited number of vehicles daily. A delegation from the US treasury and the state department meanwhile arrived to “explore the most effective ways for the US to support Sri Lankans in need”, the US embassy in Colombo said. “As Sri Lankans endure some of the greatest economic challenges in their history, our efforts to support economic growth and strengthen democratic institutions have never been more critical,” US ambassador Julie Chung said in a statement. US deputy assistant secretary of treasury for Asia, Robert Kaproth, and deputy assistant secretary of state for south and central Asia Kelly Keiderling were in the delegation. The embassy said it had committed $158.75mn in new financing in the past two weeks to help Sri Lankans. About 1.7mn residents need “life-saving assistance”, according to the United Nations which issued a flash appeal last week. Four out of five people in the nation of 22mn have reduced their food intake due to severe shortages and galloping prices, the UN noted. Prime Minister Ranil Wickremesinghe warned parliament on Wednesday that more hardships were on the way. “Our economy has faced a complete collapse,” Wickremesinghe said. “We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food.”
Cash-strapped Sri Lanka on Sunday announced sending ministers to Russia and Qatar to try and secure cheap oil a day after the government said it had all but run out of fuel. The government meanwhile extended a two-week closure of non-essential state institutions until further notice in order to save fuel, maintaining only a skeleton staff to provide minimum services. Energy Minister Kanchana Wijesekera said two ministers will travel to Russia on Monday to discuss getting more oil following last month's purchase of 90,000 tonnes of Siberian crude. That shipment was arranged through Coral Energy, a Dubai-based intermediary, but politicians have been urging the authorities to negotiate directly with President Vladimir Putin's government. "Two ministers are going to Russia and I will go to Qatar tomorrow to see if we can arrange concessionary terms," Wijesekera told reporters in Colombo. Wijesekera had announced on Saturday that Sri Lanka was virtually out of petrol and diesel after several scheduled shipments were delayed indefinitely due to "banking" reasons. Fuel reserves were sufficient to meet less than two days' demand and it was being reserved for essential services, Wijesekera said while apologising for the situation. The state-run Ceylon Petroleum Corporation on Sunday hiked the price for diesel by 15 percent to 460 rupees ($1.27) a litre and petrol by 22 percent to 550 rupees. Since the beginning of the year, diesel prices have gone up nearly four-fold and gasoline has almost tripled. Wijesekera said there would be an indefinite delay in getting new shipments of oil and urged motorists not to queue up until he introduces a token system to a limited number of vehicles daily. - US takes stock- A delegation from the US Treasury and the State Department meanwhile arrived to "explore the most effective ways for the US to support Sri Lankans in need", the US embassy in Colombo said. "As Sri Lankans endure some of the greatest economic challenges in their history, our efforts to support economic growth and strengthen democratic institutions have never been more critical," US ambassador Julie Chung said in a statement. US Deputy Assistant Secretary of Treasury for Asia Robert Kaproth and Deputy Assistant Secretary of State for South and Central Asia Kelly Keiderling were in the delegation. The embassy said it had committed $158.75 million in new financing in the past two weeks to help Sri Lankans. About 1.7 million residents need "life-saving assistance", according to the United Nations which issued a flash appeal last week. Four out of five people in the nation of 22 million have reduced their food intake due to severe shortages and galloping prices, the UN noted. Prime Minister Ranil Wickremesinghe warned parliament on Wednesday that more hardships were on the way. "Our economy has faced a complete collapse," Wickremesinghe said. "We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food." Unable to repay its $51 billion foreign debt, the government declared it was defaulting in April and is negotiating with the International Monetary Fund for a possible bailout. Sri Lanka's official inflation at the end of May was 45.3 percent, according to official data, but private economists have placed it at 128 percent, the second-highest in the world after Zimbabwe.
Sri Lanka has virtually run out of petrol and diesel after several expected shipments were delayed indefinitely, the energy minister said Saturday while apologising to motorists for the worsening fuel crisis. Kanchana Wijesekera said oil cargoes that were due last week did not turn up while those scheduled to arrive next week will also not reach Sri Lanka due to "banking" reasons. Sri Lanka is facing a serious shortage of foreign exchange to finance even the most essential imports, including food, fuel and medicines and is appealing for international handouts. Vehicles queue for diesel and petrol as they wait for a bowser since yesterday, amid the country's economic crisis, in Colombo, Sri Lanka on June 23. REUTERS Wijesekera said the state-run Ceylon Petroleum Corporation was unable to say when fresh oil supplies will be on the island. The CPC had also shut its only refinery over a shortage of crude oil, he added. The refinery started operation earlier this month using 90,000 tonnes of Russian crude oil bought through Dubai-based Coral Energy on two-month credit terms. Wijesekera said he regretted that deliveries of "petrol, diesel and crude oil shipments due earlier this week and next week" would not be fulfilled "on time for banking and logistical reasons". Scarce supplies left in the country will be distributed through a handful of pumping stations, he said. Public transport and power generation will be given priority, Wijesekera added, urging motorists not to queue up for fuel. "I apologise for the delay and inconvenience," the minister said as hundreds of thousands of motorists spent long hours waiting for petrol and diesel across the impoverished nation. Last week, the government shut non-essential state institutions along with schools for two weeks to reduce commuting because of the energy crisis. Several hospitals across the country reported a sharp drop in the attendance of medical staff due to the fuel shortage. Prime Minister Ranil Wickremesinghe warned parliament on Wednesday that the South Asian nation of 22 million people will continue to face hardships for a few more months and urged people to use fuel sparingly. "Our economy has faced a complete collapse," Wickremesinghe said. "We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food." Unable to repay its $51 billion foreign debt, the government declared it was defaulting in April and is negotiating with the International Monetary Fund for a possible bailout.
Sri Lanka will call China, India and Japan to a donor conference to drum up more foreign assistance to find a way out of its worsening economic crisis, the prime minister said on Wednesday, amid ongoing talks with the International Monetary Fund (IMF). The island nation of 22 million people is struggling with its worst financial crisis in seven decades, unable to import essentials including food, fuel and medicines because of a severe shortage of foreign exchange. The dearth of basic necessities and spiralling inflation has stroked public unrest, pushing Prime Minister Ranil Wickremesinghe's government to redouble efforts to bring in assistance from the likes of the IMF and friendly countries. "We need the support of India, Japan and China who have been historic allies. We plan to convene a donor conference with the involvement of these countries to find solutions for Sri Lanka’s crisis," Wickremesinghe told parliament. "We will also seek help from the US," he said. A high-level delegation from India will arrive on Thursday for talks on additional support from New Delhi, and a team from the US Treasury will visit next week, Wickremesinghe said. India has so far provided around $3 billion worth of assistance, including a $400 million swap and credit lines totalling $1.5 billion. China, which has traditionally jostled with New Delhi for influence over the Indian Ocean island, is considering an appeal from Sri Lanka to renegotiate the terms of a yuan-denominated swap worth $1.5 billion to fund essential imports. Negotiations with an IMF team, which arrived in Sri Lanka's commercial capital Colombo this week, have made progress, with a staff-level agreement with the lender likely by the end of the month, Wickremesinghe said. "We have discussed multiple points including fiscal policy, debt restructuring and direct cash transfers," he said. "Parallel to this we have also started talks on a debt restructuring framework, which we hope will be completed in July." Sri Lanka, which suspended payment on $12 billion of foreign debt in April, is seeking around $3 billion from the IMF to put its public finances on track and access bridge financing. Wickremesinghe said that once an agreement with the IMF was reached, his government would focus on a plan to increase Sri Lanka's exports and stabilise the economy. "It is no easy task to revive a country with a completely collapsed economy," he said, calling for opposition support for his economic recovery plan.
Sri Lankan casino magnate Dhammika Perera entered parliament on Wednesday with a mandate to revive the bankrupt island nation's wrecked economy -- working alongside a premier who once accused him of corruption. The 54-year-old Perera is a long-time loyalist of the powerful Rajapaksa clan, whom protesters have accused of mismanaging the country into its current predicament. He replaces President Gotabaya Rajapaksa's youngest brother, Basil, who resigned from parliament this month after stepping down as finance minister in April. "He was nominated by the president and will shortly take over the investment promotion portfolio and enter the cabinet," a ruling party official told AFP. Perera will serve in a unity government formed to tackle the crisis alongside Prime Minister Ranil Wickremesinghe, who in 2015 accused the casino boss of being a "demon who protected the corrupt regime of Rajapaksas". Wickremesinghe has also described Perera as one of four most corrupt businessmen in the country. Both men shook hands on Wednesday soon after Perera was sworn into parliament before the chamber's speaker. Perera -- who also has interests in banking, hotels, manufacturing, logistics and exports -- takes office at a time when Sri Lanka is suffering through months-long shortages of food, fuel and other essential goods. Long queues form outside gas stations each day for scarce petrol supplies, while regular blackouts and runaway inflation have made life difficult for the island nation's 22 million people. The government has defaulted on its $51 billion foreign debt and is seeking an International Monetary Fund bailout. Perera has claimed to have devised a plan to raise Sri Lanka's per capita income more than threefold to $12,000 -- a figure higher than China's. He has also pledged to address Sri Lanka's critical foreign currency shortage by selling 10-year visas to foreigners willing to deposit at least $100,000 in local bank accounts -- a scheme already in place since April.
Crisis-hit Sri Lanka on Tuesday reduced to 21 the minimum age at which women can go abroad for work and earn much-needed dollars for the bankrupt economy. Colombo imposed age restrictions on women working overseas in 2013. Only women older than 23 were allowed to go abroad. But with Sri Lanka in its worst economic crisis since independence, the government on Tuesday eased the rule. "The cabinet of ministers approved the decision to lower the minimum age to 21 years for all countries given the need to increase foreign employment opportunities," spokesman Bandula Gunawardana told reporters. Remittances from Sri Lankans working abroad have long been a key source of foreign exchange for the country, bringing in around $7 billion per year. This number dived during the coronavirus pandemic to $5.4 billion in 2021 and was forecast to drop under $3.5 billion this year because of the economic crisis. More than 1.6 million people from the nation of 22 million work abroad, mainly in the Middle East. The South Asian country's foreign currency reserves are so low that the government has restricted imports even of essentials including food, fuel and medicine.
Sri Lanka closed schools and halted all non-essential government services on Monday, beginning a two-week shutdown to conserve fast-depleting fuel reserves as the International Monetary Fund opened talks with Colombo on a possible bailout. The country of 22 million people is in the grip of its worst economic crisis after running out of dollars to finance even the most essential imports, including fuel. On Monday schools were shut and state offices worked with skeleton staff as part of government plans to reduce commuting and save precious petrol and diesel. Hospitals and the main seaport in Colombo were still operating. Hundreds of thousands of motorists remained in miles-long queues for petrol and diesel even though the energy ministry announced they will not have fresh stocks of fuel for at least three more days. The country defaulted on its $51 billion foreign debt in April and went cap-in-hand to the IMF. The first in-person talks with the IMF on Sri Lanka's bailout request commenced in Colombo on Monday and will continue for 10 days, the lender and the government said in brief statements. Prime Minister Ranil Wickremesinghe was also due to meet visiting Australian Home Affairs Minister Clare O'Neil to "deepen cooperation and assist Sri Lanka as the country faces very difficult economic times," Canberra said in a statement. It said O'Neil will also discuss strengthening engagement on transnational crime, including people-smuggling following a surge in would-be illegal immigrants by boat in the past month. Sri Lanka is facing record-high inflation and lengthy power blackouts, all of which have contributed to months of protests -- sometimes violent -- calling on President Gotabaya Rajapaksa to step down. Police arrested 21 student activists who blocked all gates to the presidential secretariat building after declaring Monday, Rajapaksa's 73rd birthday, a "day of mourning". The shutdown order came last week as the United Nations launched its emergency response to feed thousands of pregnant women who were facing food shortages. Four out of five people in Sri Lanka have started skipping meals as they cannot afford to eat, the UN has said, warning of a looming "dire humanitarian crisis" with millions in need of aid.
Sri Lanka's military opened fire to contain rioting at a fuel station, officials said Sunday as unprecedented queues for petrol and diesel were seen across the bankrupt country. Troops fired in Visuvamadu, 365 kilometres north of Colombo, on Saturday night as their guard point was pelted with stones, army spokesman Nilantha Premaratne said. "A group of 20 to 30 people pelted stones and damaged an army truck," Premaratne told AFP. People queue up to buy kerosene for domestic use at a supply station in Colombo. AFP Police said four civilians and three soldiers were wounded when the army opened fire for the first time to quell unrest linked to the worsening economic crisis. As the pump ran out of petrol, motorists began to protest and the situation escalated into a clash with troops, police said. Sri Lanka is suffering its worst economic crisis since independence, with the country unable to find dollars to import essentials, including food, fuel and medicines. The nation's 22 million population has been enduring acute shortages and long queues for scarce supplies while President Gotabaya Rajapaksa has for months resisted calls to step down over mismanagement. Autorickshaw drivers play a cards game while queueing to buy petrol from a Ceylon petroleum corporation fuel station in Colombo. AFP Sri Lanka has deployed armed police and troops to guard fuel stations. A motorist was shot dead by police in April at the central town of Rambukkana when a clash erupted over the distribution of rationed petrol and diesel. Police said clashes involving motorists erupted at three locations over the weekend. At least six constables were wounded in one clash while seven motorists were arrested. The government declared a two-week shutdown of state institutions and schools in a bid to reduce commuting and conserve depleting fuel stocks in the impoverished nation. The country is also facing record high inflation and lengthy power blackouts, all of which have contributed to months of protests. Four out of five people in Sri Lanka have started skipping meals as they cannot afford to eat, the UN has said, warning of a looming "dire humanitarian crisis" with millions in need of aid. The World Food Programme (WFP) began distributing food vouchers to about 2,000 pregnant women in Colombo's "underserved" areas as part of "life-saving assistance" on Thursday. The WFP is trying to raise $60 million for a food relief effort between June and December. Sri Lanka defaulted on its $51 billion foreign debt in April, and is in talks with the International Monetary Fund for a bailout.
Thousands of impoverished women in Sri Lanka began receiving food aid Thursday as part of a United Nations emergency response to the island's unprecedented economic crisis. Four out of five people have started skipping meals as they cannot afford high prices, the UN has said, warning of a looming "dire humanitarian crisis" with millions in need of aid. The World Food Programme (WFP) of the UN said it began distributing food vouchers to about 2,000 pregnant women in Colombo's "underserved" areas as part of "life-saving assistance". Anthea Webb, WFP deputy regional director for Asia and the Pacific, said poor people in the nation of 22 million were finding it harder to afford basics like food. "When they skip meals they're putting their and their children's health at risk," she said. The WFP said the distribution of cash vouchers with a value of 15,000 rupees ($40) was part of the UN's efforts to help three million Sri Lankans badly hit by soaring prices. The world body is trying to raise $60 million for the food relief effort between June and December. The WFP said it also wants to help a million children have access to at least one meal at school. They also want to provide "nutritionally fortified food" to another million mothers and children. In addition, food rations by way of food, cash or vouchers will be given to another million people, the WFP said. The South Asian island nation has been experiencing shortages of food, fuel, medicine and other essential goods, in a crisis sparked by dwindling foreign currency reserves and government mismanagement. With fuel shortages worsening, the government declared an additional holiday and ordered all schools to close on Friday to conserve petrol and diesel. Sri Lanka defaulted on its $51 billion foreign debt in April, and is in talks with the International Monetary Fund for a bailout. Months of protests, which turned deadly in May with at least nine people killed, have called on President Gotabaya Rajapaksa to resign.
Sri Lanka's cash-strapped government will need at least $5 billion in the next six months to maintain basic standards of living, including some $3.3 billion for fuel imports, the country's prime minister told parliament on Tuesday. "Only establishing economic stability not enough, we have to restructure the entire economy," said Ranil Wickremesinghe, who is working to prepare an interim budget to balance Sri Lanka's battered public finances. The island nation of 22 million is suffering its worst economic crisis in seven decades, with a shortage of foreign exchange stalling essential imports.
Sri Lanka is in talks with the International Monetary Fund (IMF) to borrow at least $3bn via the lender’s extended fund facility (EEF), sources familiar with the matter said. The island state’s government expects another round of technical talks with the IMF in early June and hopes to reach to a staff-level agreement as soon as the end of this month, two of the sources said, speaking on condition of anonymity. A spokesperson for the IMF didn’t immediately reply to a request for comment. Spokespeople for Sri Lanka’s finance ministry and central bank didn’t respond to a request for comment. Sri Lanka has requested a rescue plan to overcome its worst economic crisis since independence in 1948. It defaulted on some overseas debt earlier this year and is struggling to pay for imports of basics such as fuel and medicine. An EFF programme, which would be the 17th IMF plan for the nation, requires countries to make structural economic reforms “to correct deep-rooted weaknesses,” according to the IMF’s website. These programmes normally last three years with a grace period of four-and-a-half years to start paying back the loan, once the plan is approved. A $3bn deal would represent almost four times the country’s quota with the IMF. The IMF said last week it was in talks with Sri Lanka for a “comprehensive” reform package, but didn’t specify what type of programme was being negotiated. Prime Minister Ranil Wickremesinghe, who took office in May after mass protests forced the resignation of his predecessor, Mahinda Rajapaksa, plans to present an interim budget within weeks. The government announced on Tuesday a taxation overhaul to boost revenue, hiking corporate tax and raising the value added tax (VAT) rate to 12% from 8% with immediate effect. Sri Lanka recently appointed financial and legal advisers to kick off talks with bondholders and bilateral lenders, such as China and Japan. Meanwhile, Lanka saw its highest inflation on record for the eighth consecutive month in May, official data showed yesterday. The Colombo Consumer Price Index (CCPI) rose 39.1% year-on-year last month, up from 29.8% in April, according to the statistics department. Food inflation in Colombo came in at 57.4%, up from 46.6% in April. The price increases in May were yet to fully capture the sharp increases in fuel, one of the many vital commodities in scarce supply across the country. Private economists say consumer prices are rising even faster than official records show, with one John Hopkins University analyst tracking March inflation at 133% - more than six times the official figure.
Sri Lanka's Supreme Court suspended a presidential pardon for a murderer associated with the ruling Rajapaksa family Tuesday, ordering his immediate return to jail in a landmark decision. A three-judge bench asked the police to arrest Duminda Silva, who was facing the death penalty for a 2011 murder but was freed in June after President Gotabaya Rajapaksa granted him an amnesty. "The court fixed a further hearing for September 1, but wanted the police to carry out the interim order of arresting Duminda Silva and return him to jail," a court official said. He said the decision was given following an unprecedented challenge to the presidential pardon. Hirunika Premachandra, the daughter of former legislator Bharatha Lakshman -- who was shot dead by Silva and his associates -- filed the petition saying his release was illegal. "This decision of the Supreme Court is historic," Premachandra told AFP. "No one has challenged a presidential pardon before and I am very pleased that the court has demonstrated its independence." The killing happened during a shoot-out in the capital Colombo, between rival factions of the same political party. Lakshman was left with 24 bullet wounds, mostly to his back, while three of his supporters were also killed. Silva was injured when Lakshman's bodyguards fired back. President Rajapaksa made Silva chairman of the National Housing Development Authority after he walked free in June last year. His release drew international condemnation, with the US ambassador saying it undermined the rule of law in the South Asian nation, which is emerging from decades of war. Within four months of winning elections in November 2019, Rajapaksa released an army officer sentenced to death for slitting the throats of Tamil civilians, including four children, during the island's bloody ethnic war. Staff Sergeant Sunil Ratnayake was to be hanged for the December 2000 massacre, in a case held up by previous Sri Lankan governments as an example of accountability over abuses during the conflict. Sri Lanka's successive governments have denied allegations by rights groups that 40,000 Tamil civilians were killed by security forces in the final months of the war, which ended in May 2009.
Sri Lanka's Prime Minister Ranil Wickremesinghe was on Wednesday given the additional responsibility of running the finance ministry as the island nation grapples with its worst-ever economic crisis. The South Asian island nation has suffered months of dire shortages and anti-government protests, with importers unable to finance vital food, fuel and medicines. Wickremesinghe, 73, was sworn in as finance minister after two weeks of wrangling among coalition partners for the crucial position ahead of bailout talks with the International Monetary Fund. His appointment was delayed by a dispute between Wickremesinghe and the Sri Lanka Podujana Peramuna (SLPP) party of President Gotabaya Rajapaksa over who would take the post. "The president's party had wanted the finance portfolio, but the PM insisted he wanted it if he is to lead the country out of the economic chaos," a top politician involved in the negotiations told AFP, on condition of anonymity. Wickremesinghe is expected to soon unveil a revised budget promising relief for poorer Sri Lankans suffering through record inflation and spiralling food prices. Staff-level talks with the IMF concluded on Tuesday, but it is expected to take six more months for the Washington-based lender to agree on a bailout package, central bank officials said. Sri Lanka has already defaulted on its $51 billion foreign debt and appointed international consultants on Tuesday to help restructure its international sovereign bonds and other bilateral loans. The government has effectively ended subsidies on fuel by raising prices to a record high on Tuesday, and Wickremesinghe's administration is expected to hike electricity and water tariffs to raise much-needed revenue. Petrol and diesel both remain in short supply and motorists are forced to queue, sometimes for days, to fill up. -Fresh loan- The government this week announced it was seeking a fresh $500 million loan from India to purchase fuel, in addition to two credit lines worth $700 million already provided by New Delhi. The census office reported Monday that the country's overall inflation last month was a staggering 33.8 percent year on year, with food inflation at an even higher 45.1 percent. Sri Lanka's foreign reserves shrank dramatically from 2020 as the coronavirus pandemic hit tourism and remittances from Sri Lankans abroad. The pandemic compounded liquidity problems triggered by huge tax cuts introduced in 2019 soon after President Rajapaksa took office. Protesters have demanded the president quit over government mismanagement of the crisis. His elder brother, Mahinda Rajapaksa stepped down as prime minister two weeks ago, clearing the way for Wickremesinghe's appointment.
Sri Lanka’s central bank has secured foreign exchange to pay for fuel and cooking gas shipments that will ease crippling shortages, its governor said yesterday, but police fired tear gas and water canon to push back student protesters. Most of Sri Lanka’s petrol stations have run dry as the island nation battles its most devastating economic crisis since independence in 1948. At some pumps in the commercial capital, Colombo, dozens of people stood in lines holding plastic jerry cans, as troops in combat gear and armed with assault rifles patrolled the streets. Traffic was extremely light. Residents said most people were staying at home because of the lack of transport. Hundreds of students carrying black flags marched on Colombo’s central Fort area, chanting slogans against the government. Police fired repeated rounds of tear gas and water canon to push them back. Central bank governor P Nandalal Weerasinghe told a news conference adequate dollars had been released to pay for fuel and cooking gas shipments, utilising in part $130mn received from the World Bank and remittances from Sri Lankans working overseas. He was speaking after the central bank held interest rates steady at a policy meeting, citing a massive 7 percentage point increase in April that it said was working its way through the system. The country was more politically and economically stable, Weerasinghe said, adding that he would stay on in his post. He told reporters on May 11 he would resign in two weeks in the absence of political stability as any steps the bank took to address the economic crisis would not be successful amid turmoil. Opposition parliamentarian Ranil Wickremesinghe was named prime minister last week and he has made four cabinet appointments. However, he has yet to name a finance minister.
• Island nation runs out of petrol, 14 essential drugs Sri Lanka’s new prime minister won crucial support from two main opposition parties yesterday, easing the pressure on the ruling Rajapaksa clan in the face of the island’s worsening economic crisis. But highlighting the dire situation still facing Sri Lanka’s 22mn people, Ranil Wickremesinghe said the country had run out of petrol and that the “next couple of months will be the most difficult ones of our lives”. “I have no desire to hide the truth and to lie to the public,” Wickremesinghe said in an address to the nation. The main opposition SJB party appeared to drop its demands that President Gotabaya Rajapaksa should step down before backing a coalition to manage the crumbling economy. The SJB, or Samagi Jana Balawegaya, declined to join a unity government led by Wickremesinghe, but said it would “unconditionally support the positive efforts to revive the economy”. “It is important to save the country from the grave economic crisis,” it said in a brief statement. And the second-largest opposition party, the Sri Lanka Freedom Party (SLFP), said it would join the cabinet. Even so, thousands of protestors remained camped outside the sea-front office of 73-year-old President Gotabaya Rajapaksa, whose brother Mahinda quit as premier last week after political violence killed at least nine people. Shortages of food, fuel and medicines, along with record inflation and lengthy blackouts, have brought severe hardships to Sri Lankans, in the worst financial crisis since independence from Britain in 1948. Wickremesinghe’s appointment last week — his sixth turn as prime minister — has so far failed to quell public anger at the government for bringing Sri Lanka to the brink of economic collapse. Troops patrolled the streets as consumers queued up for scarce supplies and the government announced that a six-hour night curfew was reimposed from yesterday after a 24-hour break for a religious holiday. Wickremesinghe said yesterday that Sri Lanka had no dollars to finance essential imports with three oil tankers were waiting off Colombo to be paid before they would unload. He added that the country has run out of 14 essential drugs, including anti-rabies vaccines. The state’s health ministry has not paid its suppliers of medicines for four months and has now been blacklisted, he added. He also warned that fuel and electricity tariffs will be raised substantially and his government will also sell off its loss-making national airline. However, he urged people to “patiently bear the next couple of months” and vowed he could overcome the crisis. Wickremesinghe has struggled to form a “unity government” and a cabinet swearing-in scheduled for yesterday afternoon was pushed back as talks continued on sharing portfolios. Four ministers were sworn in on Saturday, all from Rajapaksa’s Sri Lanka Podu Jana Peramuna (SLPP) party. But there is no finance minister yet, and it is widely expected that Wickremesinghe will retain the crucial portfolio to lead ongoing negotiations with the IMF for an urgent bailout. The new prime minister held talks Sunday with World Bank and Asian Development Bank representatives in Colombo on medicine, food, fuel and fertiliser supplies, his office said in a statement. Long queues stretched outside the few fuel stations that were still open on Monday as motorists waited for rationed petrol. Heavily armed troops were patrolling the streets with a state of emergency still in effect after at least nine people were killed in violence last week.
Sri Lanka's new prime minister will address the crisis-hit nation later on Monday, as the country's power minister told citizens not to join the lengthy fuel queues that have galvanized weeks of anti-government protests. Ranil Wickremesinghe, appointed prime minister on Thursday, said he would give a "full explanation" of the financial crisis that has devastated the strategic Indian Ocean island nation, where China and India are battling for influence. "There is a lot to be done and undone. We are prioritising matters, rest assured they shall be addressed as early as possible," he said in a series of tweets on Sunday. The crisis led to widespread protests against President Gotabaya Rajapaksa and his family, culminating with the resignation of his elder brother Mahinda as prime minister last week after fighting between government supporters and protesters killed 9 people and wounded 300. The president then replaced him with Wickremesinghe, an opposition parliamentarian who has held the post five times previously, in a desperate bid to placate protesters. But the protesters have said they will keep up their campaign as long as Gotabaya Rajapaksa remains president. They have also labelled Wickremesinghe a stooge and criticised his appointment of four cabinet minister, all members of the political party run by the Rajapaksa brothers. Hit hard by the pandemic, rising oil prices and populist tax cuts by the Rajapaksas, Sri Lanka is in the midst of a crisis unparalleled since its independence in 1948. A chronic foreign exchange shortage has led to rampant inflation and shortages of fuel and other essentials, bringing thousands out on the streets in protest. A diesel shipment using an Indian credit line arrived in the country on Sunday, but is yet to be distributed across the island, leading to lengthy queues in several places. "Request the public not to queue up or top up in the next three days until the 1,190 fuel station deliveries have been completed," Power Minister Kanchana Wijesekera said on Monday. Wickremesinghe is yet to find a nominee for the crucial post of finance minister, who will negotiate with the International Monetary Fund for badly needed financial help for the country. Former Finance Minister Ali Sabry had held preliminary talks with the multilateral lender, but he quit along with Mahinda Rajapaksa last week.
A nationwide curfew was fully lifted on Sunday to allow Sri Lankans to celebrate the Buddhist festival of Vesak, while new Prime Minister Ranil Wickremesinghe assembled a cabinet to resolve the island nation's economic and political crisis. The curfew was imposed on May 9 after deadly clashes that forced Mahinda Rajapaksa to resign as premier, leaving his brother, Gotabaya Rajapaksa, to rule on as president. Many public and private buildings were flying the multi-coloured Buddhist flag, while residents visited temples dressed in all-white for Sunday's festival, which commemorates the birth, enlightenment, and death of the Buddha. More than a month of predominantly peaceful anti-government protests turned violent at the beginning of last week when supporters of the former prime minister stormed a protest camp in Colombo, torching tents and beating protestors. The clashes, and reprisals against government figures, left 9 dead and more than 300 injured. New prime minister Wickremesinghe, who has led the country five times previously, made his first cabinet appointments on Saturday. As the only lawmaker from his United National Party in the country's parliament, he is reliant on support from the Rajapaksas' Sri Lanka Podujana Peramuna to form a government. Saturday's four cabinet appointments, who were all from the Rajapaksas' party, have failed to satisfy protesters, who want the family removed from the nation's politics. Hit hard by the pandemic, rising oil prices and populist tax cuts by the Rajapaksa government, Sri Lanka is in the midst of its worst economic crisis since independence in 1948, with rampant inflation and shortages of fuel and other essentials.
Sri Lanka lifted a nationwide curfew for 12 hours on Saturday, further easing tight curbs as new Prime Minister Ranil Wickremesinghe made first his cabinet appointments after clashes between pro- and anti-government groups killed nine people. More than a month of predominantly peaceful protests against the government turned violent this week after supporters of former Prime Minister Mahinda Rajapaksa stormed an anti-government protest camp in the commercial capital Colombo, burning tents and clashing with protesters and police. The initial violence and reprisals against government figures also left more than 300 injured. Hit hard by the pandemic, rising oil prices and tax cuts by the populist government, Sri Lanka is in the throes of its worst economic crisis since independence from Great Britain in 1948. Useable foreign reserves have dwindled, and rampant inflation and shortages of fuel have brought thousands onto the streets in protest. The government lifted the curfew from 6 am (0030 GMT) on Saturday until 6pm A 24-hour curfew imposed on Monday had been lifted for a few hours on Thursday and Friday to allow purchase of essential supplies. Rajapaksa stepped down after violence flared on Monday, leaving his younger brother Gotabaya Rajapaksa to rule on as president. Wickremesinghe, a five-time prime minister, was appointed to another term late on Thursday. He appointed four ministers from the Rajapaksas' Sri Lanka Podujana Peramuna (SLPP), a decision unlikely to satisfy the protesters demanding the removal of the party from power. The appointments, announced by the president's office, include G.L. Pereis, the SLPP chairman who had held the post before resigning on Monday. Wickremesinghe is the sole lawmaker from his United National Party to hold a seat in parliament, and is reliant on other parties to form a coalition government. The SLPP has pledged to support him. The main opposition has ruled out supporting him, but several smaller parties have said they would back policies by the new prime minister to stabilise the economy.