COLOMBO, Sri Lanka –
Cash-strapped Sri Lanka extended school closures for a week on Sunday because there is not enough fuel for teachers and parents to get children into classrooms, with the energy minister calling on expats of the country to send money home through the banks to finance new oil purchases. .
A huge external debt has left the Indian Ocean island with none of the suppliers willing to sell fuel on credit. Available stocks, enough only for several days, will be provided for essential services, including health and port workers, public transport and food distribution, officials said.
“Finding money is a challenge. It’s a big challenge,” Power and Energy Minister Kanchana Wijesekera told reporters.
He said the government has ordered new fuel stocks and the first ship with 40,000 metric tons of diesel is expected to arrive on Friday, while the first ship with gasoline will arrive on July 22.
Several other fuel shipments are on the way. But he said authorities are struggling to find $587 million to pay for the fuel. Wijesekera said Sri Lanka owed some $800 million to seven fuel suppliers.
Last month, schools across the country closed for a day due to fuel shortages and have been closed for the past two weeks in urban areas. Schools will remain closed through Friday.
Authorities also announced power cuts across the country of up to three hours a day starting Monday because they are unable to supply enough fuel to power generating stations. Sweeping power cuts have plagued Sri Lanka’s economy for months, along with severe shortages of basic goods including cooking gas, medicine and imported food.
Wijesekera said the main problem is the lack of dollars and appealed to some two million Sri Lankans working abroad to send their foreign exchange earnings home through banks instead of informal channels.
He said workers’ remittances, typically $600 million a month, had dropped 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, down 53%.
The drop came after the government ordered mandatory foreign currency conversion last year. He said black market premiums have led people to hoard hard currency.
Sri Lanka has been getting most of its fuel needs from neighboring India, which has provided a line of credit. The government said it was also negotiating with suppliers in Russia and Malaysia.
Sri Lanka has defaulted on around $7 billion in foreign loans due this year out of $25 billion due by 2026. The country’s total foreign debt is $51 billion.
The economic crisis has triggered a political crisis with widespread anti-government protests across the country. Protesters blocked major roads demanding gasoline and fuel, and TV stations showed people in some areas fighting over limited supplies.
In the capital Colombo, protesters have been occupying the entrance to the president’s office for more than two months demanding the resignation of President Gotabaya Rajapaksa. They accuse him and his powerful family, which included several brothers who held high government positions, of plunging the country into crisis through corruption and misrule.