21.02.2022 - 25.02.2022 A Tate Papers Apine (2)

Sri Lanka’s state-owned oil company is running out of money to buy oil, and energy shortages across the country could worsen, Energy Minister Udaya Gammanpila said on February 18.

The loss-making state-owned Ceylon Petroleum Corporation (CPC) continues to suffer financial losses and will no longer be able to buy fuel from abroad, Gamman Pella said.

“Earlier, we ran out of dollars to buy oil,” he said. “Now we don’t even have a rupee to buy a dollar,” Gamman Pella told reporters in Colombo.

In Sri Lanka, diesel is the most widely used form of public transport, and motorcyclists line up outside Colombo to refuel at gas stations.

Meanwhile, some thermal power plants were shut down on the afternoon of February 18 due to fuel shortages, leading to power shortages across the country and the need to resume power supply.

According to Gamman Pella, the CPC lost 42 percent of its diesel sales at government-mandated prices, up from $ 415 million in the last year alone.

“Even a tax exemption on oil sales will not offset our financial losses,” he said. “Without an increase in oil prices or lack of financial support, power shortages will certainly worsen.”

In Sri Lanka, the shortage of foreign currency has had a devastating effect on the country’s energy sector, which is largely dependent on imports for its oil needs.

Such fuel shortages have shut down thermal power plants and caused unannounced power outages across the country. Sri Lanka’s economy is causing food shortages and supermarkets are selling rations of basic foodstuffs, including rice. In addition, auto parts and cement are in short supply.

Such food and consumer shortages pushed up to 25 per cent in Sri Lanka last month. In addition, the major tourism sector in foreign exchange was affected by the COVID-19 epidemic.