Newly-appointed Sri Lankan Prime Minister (PM) Ranil Wickremesinghe warned that the country only has enough petrol to last for a single day during his first public address after being appointed last week.
While addressing the nation on Monday, Wickremesinghe stressed that the Finance Ministry is struggling to raise the required $75 million needed to import gas and ease the hour-long queues that citizens have been forced to wait in. The government requires $20 million to supply gas directly to consumers and meet the need for kerosene and furnace oil.
India sends 12 shipments and more than 400,000 MT of Diesel to Sri Lanka under line of credit. pic.twitter.com/0hac1owLmS
— Sidhant Sibal (@sidhant) May 15, 2022
He noted that three ships with crude oil and furnace oil have been docked in Sri Lankan waters for over 40 days, as the government does not have enough foreign reserves to pay for the shipment. The PM remarked that the Central bank, local state and private banks, and foreign banks are all low on dollar reserves.
However, he revealed that with the help of India’s Line of Credit, the government was able to secure a diesel shipment on Monday. In this regard, he appreciated India’s assistance during these “adverse circumstances.”
Two other diesel shipments are scheduled to arrive on May 18 and June 1 under the Indian Line of Credit. Additionally, India will also deliver two petrol shipments on May 18 and May 29.
7. Electricity:
— Ranil Wickremesinghe (@RW_UNP) May 16, 2022
• Solution: For over 40 days 3 ships with crude oil and furnace oil have been anchored within the maritime zone of SL. We have already obtained money to avert this crisis. #EconomicCrisisLK
Stressing the severity of the shortage, Wickremesinghe said that oil is necessary to generate at least 25% of the country’s electricity. In this respect, shortages could push the government to extend power cuts from 12 hours to 15 hours a day.
Against this backdrop, the new PM said, “I did not request this position…I assumed this duty not only as a political leader, but also as national leader.” The address was made in pursuance of the Sri Lankan PM’s desire to remain transparent with the public. He said, “Although these facts are unpleasant and terrifying, this is the true situation.”
He warned that the coming months will be “the most difficult,” saying citizens must be prepared to “make some sacrifices and face the challenges of this period.” However, he reassured that with the help of “foreign allies” who have vowed to support the country, the tough times “will not be long.”
4. Fuel Stocks:
— Ranil Wickremesinghe (@RW_UNP) May 16, 2022
• Problem: In order ease the queues, we need approx. USD 75 million. We only have petrol stocks for a single day. #SriLankaEconomicCrisis
Expanding on the extent of the economic crisis, he said that high-interest rates and additional expenditures made by his predecessors have raised government expenditure from $9.4 billion to $12 billion.
More concerningly, Wickremesinghe said that expected revenue is a meagre $4.6 billion, as opposed to the $6 billion projected by the previous government. He highlighted that the budget deficit stands at $6.8 billion, or 13% of the GDP.
Apart from oil shortages, the PM also highlighted shortages of essential medicines, particularly those needed for heart issues and surgeries. “Payments have not been made for four months to suppliers of medicine, medical equipment, and food for patients,” he noted.
The government owed $97 million to these suppliers. Consequently, the Medical Supplies Division could not provide two of the 14 essential medicines, namely those needed to treat heart diseases and the anti-rabies vaccines.
9. Medicine:
— Ranil Wickremesinghe (@RW_UNP) May 16, 2022
• Problem: Severe shortage of medicine and surgical equipment. Payments amounting to SLR 34 Billion due for 4 months to suppliers of medicine, medical equipment, and food for patients.
• Solution: In the process of exploring solutions to address these shortages.
He informed that the government also owes money to the State Pharmaceuticals Corporation (SPC), which has not been paid for four months. Consequently, international pharmaceutical companies are in the process of blacklisting the SPC.
To address these pressing concerns, PM Wickremesinghe said that the government would present a “concessionary” budget as an alternative to the one proposed by his predecessor Mahinda Rajapaksa.
Furthermore, he announced that he has permitted the Central Bank to print additional money for the salaries of state employees and to pay for essential goods and services. The PM acknowledged that this would further depreciate the value of the Sri Lankan rupee, especially amid record-high inflation. In this regard, he said he was forced to make the decision “against [his] own wishes,” as even the Petroleum Corporation and the Electricity Board have not been able to acquire rupees for payments.
11. Last Thursday when I accepted office as the Prime Minister, I did not do so only as a Political Leader but also as a National Leader who has benefited from free education at the Faculty of Law of the University of Colombo. #SriLankaCrisis
— Ranil Wickremesinghe (@RW_UNP) May 16, 2022
Additionally, Wickremesinghe proposed that the state-owned Sri Lankan Airlines should be privatised to ease the burden on the government, owing to “extensive losses.” As of March 31, its total losses were estimated at over $1 billion. However, he acknowledged, “Even if we privatise Sri Lankan Airlines, this is a loss that we must bear. You must be aware that this is a loss that must be borne even by the poor people of this country who have never stepped on an airplane.”
Meanwhile, he called on all political parties to come together and establish a National Assembly that sees the participation of all parties. “This will enable us to discuss with all parties and to arrive at decisions for short-, medium-, and long-term action plans that will enable us to rebuild our nation within a specified time frame,” he asserted.
For SJB the struggle continues to be about ending the “Rajapaksa rule”. We strongly believe it is the first step if we want to rebuild Sri Lanka. Under this regime no SJB member will hold any positions.
— Sajith Premadasa (@sajithpremadasa) May 17, 2022
Sri Lanka is in real chaos. Hungry residents are literally preying on wealthy residents and officials, burning their homes and cars. The police open fire to kill. More than 200 people have already been killed. pic.twitter.com/SBdXTsXpnE
— Wittgenstein (@backtolife_2022) May 16, 2022
Sri Lankan PM Ranil Wickremesinghe took over from his predecessor Mahinda Rajapaksa last Thursday after weeks of protests over the government’s mishandling of the crisis turned violent. The newly-appointed PM has not announced his nomination for key ministerial posts, including the finance minister, who will be holding aid negotiations with the International Monetary Fund.
Despite the political changes, citizens appear to remain dissatisfied and continue to protest and demand President Gotabaya Rajapaksa’s resignation. They are also frustrated by hours-long power cuts, long queues for fuel, and severe shortages of essential items such as food and medicine.