Sri Lanka PM Ranil Wickremesinghe says economy has collapsed, unable to buy oil

Sri Lanka’s prime minister says its debt-laden economy has “collapsed” after months of shortages of food, fuel and electricity, and the South Asian island cannot even buy imported oil.

Also read: Explanation of the economic crisis in Sri Lanka

“We are now faced with a much more serious situation than just the shortages of fuel, gas, electricity and food. Our economy has completely collapsed. That is the most serious issue before us today,” Prime Minister Ranil Wickremesinghe told parliament.

Mr Wickremesinghe is also the finance minister charged with stabilizing the economy, which is collapsing under the weight of heavy debt, lost tourism revenues and other impacts of the pandemic and rising raw material costs.

Members of Samagi Vanitha Balawegaya, part of the main opposition party Samagi Jana Balawegaya, try to move a barrier during a protest near the private residence of Prime Minister Ranil Wickremesinghe of Sri Lanka amid the country's economic crisis, in Colombo , Sri Lanka on June 22.  2022.

Members of Samagi Vanitha Balawegaya, part of the main opposition party Samagi Jana Balawegaya, try to move a barrier during a protest near the private residence of Prime Minister Ranil Wickremesinghe of Sri Lanka amid the country’s economic crisis, in Colombo , Sri Lanka on June 22. 2022. | Photo credit: Reuters

“Currently, the Ceylon Petroleum Corporation is in debt of $700 million,” he told lawmakers. “As a result, no country or organization in the world is willing to fuel us. They are even reluctant to provide fuel for cash,” he said.

Mr Wickremesinghe said the government had not intervened in time to turn the situation around as Sri Lanka’s foreign reserves dwindled.

“If at the very least measures had been taken in the beginning to slow down the collapse of the economy, we would not be facing this difficult situation today. But we missed this opportunity. We are now seeing signs of a possible decline to the bottom,” he said.

Sri Lanka is muddling through, supported mainly by $4 billion in credit lines from neighboring India. But Mr Wickremesinghe said India cannot keep Sri Lanka afloat for too long.

Also Read:Sri Lankan cabinet approves 21st amendment to give parliament more power than president

Sri Lanka has already announced it is suspending repayment of $7 billion in foreign debt due this year, pending the outcome of negotiations with the International Monetary Fund on a bailout package. It has to pay an average of $5 billion a year until 2026.

The currency crisis has led to massive shortages that have left people standing in long lines to buy essentials such as fuel, cooking and medicines.

Leave a Comment

Your email address will not be published.