Sri Lanka President calls Putin; plans to visit UAE to explore options for fuel imports

by mcdix

Gotabaya Rajapaksa will soon embark on a tour of the United Arab Emirates to import fuel from the oil-rich Gulf state.

Gotabaya Rajapaksa will soon embark on a tour of the United Arab Emirates to import fuel from the oil-rich Gulf state.

Sri Lankan President Gotabaya Rajapaksa has called his Russian counterpart Vladimir Putin to explore options to buy oil from Moscow as Colombo tries desperately to replenish its dwindling fuel supplies amid an unprecedented economic crisis, a minister said.

Mr. Gotabaya will also tour the United Arab Emirates shortly to import fuel from the oil-rich Gulf state.

On Monday, the Sri Lankan government announced that only essential services would operate from midnight to July 10. All other operations will be temporarily suspended as the island of 22 million faces an acute fuel shortage.

“President Gotabaya has called on the Russian President to import fuel from Russia. He also plans to travel to the UAE to discuss with their leaders to import fuel,” Economy Next news portal quoted Secretary of State for Power and Energy Mahindananda Aluthgamage, and a close ally of the President, at a media briefing, about Tuesday.

Sri Lanka’s economy has virtually stopped after foreign exchange reserves to import fuel ran out.

On Monday, Rajapaksa tweeted that he had met Yuri Material, Russia’s ambassador to Sri Lanka, to discuss the country’s economic crisis caused by a crippling shortage of foreign exchange reserves.

“Had a productive meeting with Russian Ambassador Yuri Material yesterday. Maintaining robust bilateral relations between our two countries while focusing on developing trade opportunities was discussed extensively at this meeting,” he tweeted on Tuesday.

Had a productive meeting with Russian Ambassador Yuri Material yesterday. Maintaining strong bilateral relations between our two countries while focusing on developing trade opportunities was discussed extensively during this meeting. pic.twitter.com/N15LBwFquG

— Gotabaya Rajapaksa (@GotabayaR) June 28, 2022

Putin

Last month, Sri Lanka bought 90,000 tons of oil from Russia.

Sri Lankan Energy and Power Minister Kanchana Wijesekera flew to Qatar on Monday to negotiate a long-term fuel supply agreement with the Gulf state.

Prime Minister Ranil Wickremesinghe, also Sri Lanka’s finance minister, has warned the country will need up to $5 million to pay for its fuel imports.

As a result, schools have been closed for two weeks due to the ongoing fuel crisis, and supplies have only been diverted to essential services, while employees of government offices have also been asked to work from home.

No fuel tankers carrying supplies have arrived on the island since June 24, while state-run fuel retailer Ceylon Petroleum Corporation says no new orders have been placed.

Meanwhile, the government’s Bureau of Statistics said on Tuesday that economic growth in the first quarter of this year is expected to grow by 1.6 percent due to the financial crisis.

One publication said fuel shortages had hit all sectors, with reduced production contributing to negative growth.

The near-bankrupt country, with an acute currency crisis that resulted in foreign debt default, announced in April that it was suspending repayment of nearly $7 billion in foreign debt for this year of about $25 billion due through 2026.

Sri Lanka’s total external debt is $51 billion.

Sri Lankans continue languishing in long fuel and boiling gas queues as the government cannot find dollars to finance imports.

So far, an estimated 12 people have died queuing for fuel from exhaustion, physical ailments, or accidents.

Outraged citizens want President Rajapaksa and his government to step down immediately over their inability to address fuel shortages.

Indian lines of credit for fuel and supplies have provided lifelines until ongoing talks with the International Monetary Fund could lead to a possible bailout.

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