Amid its greatest economic crisis in decades, Sri Lanka has ceased selling fuel for non-essential automobiles.
For the next two weeks, only buses, trains, and vehicles bringing medical services and food will be permitted to refuel.
Officials have ordered the country’s 22 million citizens to work from home and have closed urban schools.
As it struggles to pay for imports such as petroleum and food, the South Asian nation is negotiating a bailout package.
Sri Lanka is the first country “since the 1970s oil crisis when petrol was rationed in the U.S. and Europe and speed limits were enforced to curb consumption,” said Nathan Piper, head of oil and gas research at Investec.
He stated that the embargo highlighted the sharp surge in oil prices and Sri Lanka’s inadequate foreign exchange reserves.
Many residents of the island do not know how they will survive without fuel. In recent months, there have been lengthy lines at gas stations across Sri Lanka.
Colombo taxi driver Chinthaka Kumara, age 29, believed the prohibition would “cause additional complications for people.”
“I am an hourly pay earner. I’ve waited in this line for three days, and I have no idea when we will receive gasoline”.
Drivers have been ordered to return home, and tokens have been handed to ration scarce fuel supplies. Some continued to wait in line, while others could not.
“I waited in line for two days. I have a token, number 11, but I am unsure when I will receive fuel “S Wijetunga, a 52-year-old executive in the private sector.
“I must go to the workplace immediately, therefore I am compelled to leave my car here and use a three-wheeler.”
Extreme economic turmoil
Due to the pandemic, growing energy costs, and populist tax cuts, Sri Lanka lacks sufficient foreign currency to pay for imports of vital products.
Acute shortages of fuel, food, and medications have contributed to record-breaking increases in the cost of living in a nation where many people rely on motor vehicles for their livelihoods.
The government said on Monday that it will prohibit private automobiles from purchasing gasoline and fuel until July 10th.
Bandula Gunewardena, a spokesperson for the Cabinet, stated that Sri Lanka has “never encountered such a serious economic crisis in its history.”
The cash-strapped nation has also dispatched representatives to the main energy-producing nations of Russia and Qatar to secure inexpensive oil supplies.
Officials reported over the weekend that the nation possessed only 9,000 tonnes of diesel and 6,000 tonnes of gasoline to fuel key services in the coming days.
According to estimates, the inventories would last less than a week under normal demand.
Sunday, electricity and energy minister Kanchana Wijesekera told reporters, “We are trying everything we can to get additional supplies, but we do not know when that will be.”
Alex Holmes, a senior economist at Oxford Economics, told that the gasoline limitations were “yet another minor indication of a deteriorating problem.”
“The fact that people were waiting in [large] lines for fuel suggests that mobility was already severely restricted. But a total ban on private vehicles goes a step further and will exacerbate economic distress “he continued.
In May, the nation defaulted for the first time on its obligations to international creditors. This followed weeks of protests against the government of President Gotabaya Rajapaksa. His brother, Mahinda, resigned as prime minister, but the president continues to face resignation pressure.
A team from the International Monetary Fund arrived in Sri Lanka last week to discuss a $3 billion (£2.4 billion) bailout package.
The administration also seeks aid from India and China to import necessary goods. Earlier this month, the new prime minister, Ranil Wickremesinghe, stated that the country will need at least $5 billion over the next six months to pay for necessities such as food, fuel, and fertilizer.
Amid fears of a food crisis, ministers have urged farmers to cultivate more rice and offered government officials an additional day off every week to cultivate food.
The administration attributes the situation to the Covid outbreak, which negatively impacted Sri Lanka’s tourism industry – one of the country’s largest foreign exchange-earners.
However, many experts say that mismanagement is the primary reason for the economic downfall.
Sri Lanka’s foreign currency reserves plummeted to nearly nothing as a result of years in which it imported significantly more than it exported and piled up enormous debts with China on contentious development projects.
When foreign money shortages became a severe issue for Sri Lanka in early 2021, the government banned imports of chemical fertilizer and instructed farmers to utilize locally obtained organic fertilizer instead.
This resulted in extensive crop failure. Sri Lanka had to import additional food supplies from outside, which exacerbated its foreign money shortfall.
