Fuel queues get longer as Sri Lanka dries up

• Interim Govt. scrambles to firm up fresh fuel supplies as every operating petrol shed sees endless queues with people suffering for long hours
• SJB MP says last Indian shipment is due on Friday, no finality on request for more from SL
• Indian supplies estimated at $ 1.5 b thus far
• Prime Minister’s remark that SL may be forced to seek supplies from Russia raises concern over limited options; SL urged to diversify source base and consider bilateral deals with Iran and Iraq
• Planned move to offer fuel via quota system from July underlines fresh supply crisis 
• Fuel import bill up 38% to $ 1.92 b in the first four months
• Quantity-wise refined petroleum and other related imports down by 14% to 1.18 m tons in 1Q
• Despite shortages and queues diesel sales in 1Q up 17% to 642,000 tons and petrol sales up 9% to 386,000 tons

Fuel queues are getting longer piling more hardships on the public as the President Gotabaya Rajapaksa Prime Minister Ranil Wickremesinghe led interim Government is running out of sourcing options despite assurances earlier on ready supplies.

The suffering via endless queues in recent days was first predicted by the Prime Minister last week in his special address in Parliament. That warning however according to analysts was after the Premier’s assurance previously that fuel shortage will be resolved preceded by a remark that the interim administration has succeeded in ending the fuel queues mid last month.

There were long queues in all key towns waiting hours for fuel whilst petrol stations were shut in other places. Judging by the Prime Minister’s warning last week the plight of people will worsen till the end of June. 

As forewarned by himself about a coupon system, Power and Energy Minister Kanchana Wijesekara on Sunday announced that the Government has been forced to introduce a quota system for fuel purchases from July. His excuse however was alleged hoarding on the part of motorists, but analysts alleged that the real reason was the Government has failed to finalise and secure fresh supplies.

The Premier told the US Associated Press that Sri Lanka will be forced to seek more fuel supplies from Russia even at the risk of international condemnation. One reason to tap Russia is that supplies from India are coming to an end.

SJB MP Dr. Harsha de Silva yesterday said that the last fuel shipment from India is due on 17 June and though Sri Lanka has requested for more India has not made a decision yet. To date India is estimated to have extended fuel supplies worth $ 1.5 billion. 

The current predicament also exposes the failure by Sri Lanka to diversify its sourcing options to include countries such as Iran (with tea supplies as barter) and Iraq as well as other Gulf nations on a bilateral basis. 

In the first four months of this year Sri Lanka has spent $ 1.92 billion on fuel imports up by 38% from the corresponding period of 2021. Of that, refined petroleum imports amounted to $ 1.55 billion, up by 49.7% and coal shipments up by 102% to $ 256 million. Between January and March (1Q) fuel imports were up 44.5% to $ 1.4 billion. In terms of quantity, refined petroleum and other imports were down by 14% to 1.18 million tons. 

Wickremesinghe last week told Parliament that the country spends $ 500 million per month on fuel. He warned that the current global crisis risks raising oil prices. “Some estimate that global oil prices will rise by as much as 40% by the end of this year. In this context the idea of introducing a coupon system for fuel cannot be ruled out. Somehow, we have to find $ 3,300 million worth of fuel for the next six months,” the Premier told the Parliament. 

It was in this context that he emphasised: “The next three weeks will be a tough time for us in regard to fuel. It is time we all must use fuel and gas as carefully as possible. Unessential travel should be limited as much as possible. Therefore, I urge all citizens to refrain from thinking about hoarding fuel,” Wickremesinghe said. 

“After those difficult three weeks, we will try to provide fuel (and food) without further disruptions. Negotiations are underway with various parties to ensure this happens. After these difficult three weeks, we are trying to ensure the shortage of fuel and gas will have ended. Let’s face these difficult three weeks united and patiently,” the Premier added.

Last week’s appeal was not the first by the Premier. On 19 May, during an address in Parliament he urged for conservation of fuel and called on non-essential State sector workers to stay home. In the same speech he assured Parliament that over the weekend the fuel shortage will be resolved. More recently he also assured three-wheeler owners the same. 

UNP National Organiser Sagala Ratnayake-led Committee has been tasked with the responsibility of finding solutions to fuel problems.

Whilst first four months data is pending, sales of diesel and petrol in the first quarter has seen an increase despite the shortages and queues. Diesel sales in the 1Q were up by 17% to 642,000 tons and petrol sales were up 9% to 386,000 tons.