Sri Lanka has run out of money to buy fuel, PM says

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Sri Lanka’s economy has collapsed and the country can no longer even pay for fuel imports, Prime Minister Ranil Wickremesinghe told parliament on Wednesday. “The national oil company CPC has a mountain of debt of 700 million dollars and therefore no one wants to supply us with oil anymore,” he says.

Sri Lanka has been struggling for several months with its worst economic crisis in 70 years. There are severe shortages of food, medicine and fuel. From now on, the country can no longer pay for oil imports. Normally, the country consumes about 1120,000 tons of diesel and 75,000 tons of gasoline per month.

This stoppage of imports is due to the fact that the state oil company Ceylon Petroleum Company currently has 700 million dollars (nearly 666 million euros) in debt.

“As a result, no country or company wants to supply us with oil, even if we pay cash,” said Wickremesinghe, who is also prime minister and finance minister.

Hard hit by the corona pandemic

Sri Lanka has been hit hard by the corona pandemic, which has led to fewer tourists and more debt. As a result, and due to a lack of money from abroad, large deficits have arisen. Inflation reached 39%. And the country defaulted on some of its debts last month.

The government has already announced that it will postpone $7 billion in disbursements for this year until negotiations with the IMF on a contingency plan are concluded. Until 2026, the country will have an average of $5 billion in debt per year.

Wickremesinghe, who has just taken office as prime minister, says the previous government failed to act in time. “If measures had been taken to slow the collapse of the economy, we would not be in this situation today. But we missed this opportunity and are now faced with an economy that is plunging to the bottom,” a- he said Wednesday.

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