Cash-Strapped Sri Lanka Responds To Energy Crisis

Sri Lanka’s power and energy minister Kanchana Wijesekera announces that the government will lift restrictions on fuel imports in response to the country’s energy crisis, ending a fuel duopoly between the state-owned Ceylon Petroleum Corporation and the Indian government-owned Lanka IOC.

The Sri Lankan economic crisis is an ongoing crisis in the island-state of Sri Lanka that started in 2019. It is the country’s worst
economic crisis since its independence in 1948. It has led to unprecedented levels of inflation, near-depletion of foreign exchange reserves, shortages of medical supplies and an increase in prices of basic commodities. The crisis is said to have begun due to multiple compounding factors like tax cuts, money creation, a nationwide policy to shift to organic or biological farming, the Easter bombings in 2019, and the impact of the COVID-19 pandemic. The subsequent economic hardships resulted in the 2022 Sri Lankan protests.

Sri Lanka’s 22 million people are struggling to pay for essential imports of food, medicine and, most critically, fuel. Sri Lanka is now allowing companies from oil-producing countries to import and sell fuel, the power and energy minister said on Tuesday, ending a duopoly as it tries to overcome a shortage of petrol and diesel that is exacerbating an economic crisis. In this critical condition of the country, Sri Lanka announced weekly fuel quotas for motorists on Sunday, as an acute shortage worsened and longer queues formed outside the few pumping stations still operating.

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