Sri Lanka imposes power cuts as currency crisis deepens, Energy News, ET EnergyWorld

COLOMBO: Sri Lankan authorities are imposing staggered power cuts as the country continues to suffer the worst economic crisis in decades, which has led to fuel shortages and frequent power outages.

Sri Lanka’s Public Utilities Commission said it would shut down the grid for four hours and 40 minutes on Wednesday due to a 540-megawatt shortage, officials from the state-owned Ceylon Electricity Board (CEB) said.

President Gotabaya Rajapaksa had called a special Cabinet meeting on Tuesday to discuss the electricity crisis and fuel shortages.

The depletion of foreign exchange reserves has hampered imports of fuel and other essentials. The Sri Lankan government admitted on Monday that it had run out of money to buy fuel as the pumps at most gas stations across the country ran dry. Sri Lanka’s current economic situation is so dire that it does not even have enough US dollars to pay for two fuel shipments.

“Two shipments of fuel arrived today but we are unable to pay for them,” Sri Lankan Energy Minister Udaya Gammanpila said on Monday.

Last week, state-owned refinery Ceylon Petroleum Corporation (CPC) said it had run out of money to source supplies overseas. The CPC suffered losses to the tune of $415 million in 2021 due to the sale of diesel at prices set by the government.

“I had warned of impending fuel shortages due to the dollar crisis twice in January and once earlier this month,” Gammanpila said.

The worsening foreign exchange shortage in Sri Lanka has severely affected the energy sector, which is entirely dependent on imports for its oil needs. The fuel shortage has resulted in long queues at undersupplied pumps across the country. Fuel shortages have interrupted the operation of at least three thermal power plants, the CEB said.

At the special cabinet meeting held on Tuesday, the Sri Lankan government decided not to raise fuel prices, Energy Minister Mahinda Amaraweera said. In addition, the Ministry of Finance has agreed to repay the Rs 80 billion debt owed by the Ceylon Electricity Board to the Ceylon Petroleum Corporation for fuel, he added.

Earlier this month, Sri Lanka purchased 40,000 metric tons of diesel and gasoline from India’s major oil company Indian Oil Corporation to meet urgent energy needs from the economic crisis, compounded by depleted oil reserves. exchange.

“India is a committed partner and a true friend of Sri Lanka. The High Commissioner (Gopal Baglay) handed over a cargo of 40,000 tons of fuel by Indian Oil Company,” said a statement issued by the High Commission. Indian here.

India’s delivery of the fuel came amid news of Sri Lankan Finance Minister Basil Rajapaksa’s visit to India in a fortnight to formalize India’s economic relief package for the beleaguered country. to a severe currency crisis.

Last month, India announced a $900 million loan to Sri Lanka to build up its depleted foreign exchange reserves and for food imports, amid a shortage of almost all essentials in the country.

Earlier this month, a deal giving Sri Lanka a $500 million line of credit for fuel purchases was also sealed as part of the immediate economic relief package.

Tourism, another key foreign exchange earner, has also seen a lull due to the pandemic.