COLOMBO— Sri Lankan energy companies said on Monday that they were running out of liquid petroleum gas used primarily in cooking, as a shortage of foreign exchange put renewed pressure on the island nation.
Hit hard by the pandemic, rising oil prices and tax cuts by President Gotabaya Rajapaksa’s populist government, Sri Lanka has just $ 50 million in usable foreign reserves, the finance minister said last week. Ali Sabry.
Shortages of mostly imported fuel, food and medicine led to more than a month of mostly peaceful anti-government protests, though Rajapaksa declared a state of emergency for the second time in five weeks on Friday.
Litro Gas state president Vijitha Herath told Reuters that the Sri Lankan currency crisis is causing a severe gas shortage with the company struggling to find adequate dollars for payments.
“With the president’s involvement, we will get $ 7 million from the central bank to pay for a 3,500 metric ton (MT) shipment, which is expected to arrive on Tuesday,” he said.
Sri Lanka needs a minimum of 40,000 MT per month for gas, which costs around $ 40 million at current prices.
The long lines for cooking gas seen in recent days have often turned into impromptu protests as frustrated consumers block the streets.
The second actor in the Sri Lankan duopoly, Laugfs Gas, has less than 2000 tons of gas, which has been reserved for industries and hospitals. The company is also struggling to find dollars and is currently in talks to use its assets overseas to open letters of credit.
“We are a bankrupt nation. Banks don’t have enough dollars to open lines of credit and we can’t go to the black market. We are struggling to keep our businesses afloat, “said Laugfs President WHK Wegapitiya.
He estimated it would take at least another week for the company to secure a gas shipment.
On Monday, several hundred supporters of the ruling party gathered outside Prime Minister Mahinda Rajapaksa’s official residence after local media reported that he may step down to ease pressure on the president, who is his younger brother.
“Whose power is it? The power of Mahinda! they shouted as the gates of the complex opened for them to enter.
Sri Lanka has turned to the International Monetary Fund for a bailout and on Monday will begin a virtual summit with officials from the multilateral lender aimed at securing emergency assistance.
—Reportage of Alasdair Pal and Uditha Jayasinghe in Colombo; Editing by Raju Gopalakrishnan