COLOMBO, Sri Lanka (AP) — Cash-strapped Sri Lanka extended school closures for a week on Sunday because there is not enough fuel for teachers and parents to bring children to classrooms, and the energy minister has called on the country’s expats to send home money through banks to finance new oil purchases.
A huge foreign debt left the Indian Ocean island without any of the suppliers wanting to sell fuel on credit. Available stocks, sufficient for just a few days, will be provided to essential services, including health and port workers, public transport and food distribution, officials said.
“Finding money is a challenge. It’s a huge challenge,” Energy and Energy Minister Kanchana Wijesekera told reporters.
He said the government had ordered new stocks of fuel and the first ship with 40,000 metric tons of diesel was expected to arrive on Friday while the first ship carrying gasoline would arrive on July 22.
Several other fuel shipments are underway. But he said authorities were struggling to come up with $587 million to pay for the fuel. Wijesekera said Sri Lanka owed about $800 million to seven fuel suppliers.
Last month, schools across the country were closed for a day due to fuel shortages and have remained closed for the past two weeks in urban areas. Schools will remain closed until Friday.
Authorities have also announced nationwide power cuts of up to three hours a day from Monday as they cannot supply enough fuel to power plants. Major power outages have plagued Sri Lanka’s economy for months, with severe shortages of essentials, including cooking gas, medicine and food imports.
Wijesekera said the main problem is the lack of dollars and called on some 2 million Sri Lankans working abroad to send their foreign exchange earnings through banks rather than informal channels.
He said workers’ remittances, which typically amounted to $600 million a month, fell to $318 million in June.
According to the Central Bank, remittances – the country’s main source of foreign exchange – fell from $2.8 billion in the first six months of 2021 to $1.3 billion in the same period this year. , a decrease of 53%.
The decline came after the government last year ordered mandatory foreign currency conversion. He said black market bounties led people to hoard foreign currency.
Sri Lanka got most of its fuel needs from neighboring India, which provided it with a line of credit. The government said it was also negotiating with suppliers in Russia and Malaysia.
Sri Lanka has suspended repayment of around $7 billion in foreign loans due this year out of the $25 billion to be repaid by 2026. The country’s total external debt is $51 billion.
The economic collapse sparked a political crisis with widespread anti-government protests erupting across the country. Protesters blocked major roads to demand petrol and fuel, and TV stations showed residents in some areas fighting over limited supplies.
In the capital, Colombo, demonstrators have occupied the entrance to the president’s office for more than two months to demand the resignation of President Gotabaya Rajapaksa. They accuse him and his powerful family which included several siblings in high-level government positions of plunging the country into crisis through corruption and mismanagement.
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