Sri Lankans face daily power cuts, ongoing school closures as fuel crisis grows

Cash-strapped Sri Lanka will extend school closures for another week and switch off power nationwide for up to three hours a day, as it faces an increasingly critical shortage of fuel.

Government is now seeking fuel from Russia as other countries refuse to supply more without payment

Sri Lanka's government says schools will stay shut and power will be cut nationwide for up to three hours a day to save fuel, amid the country's economic crisis. Here, a member of Sri Lanka's military checks the tokens of people queueing for fuel in Colombo on June 27. (Dinuka Liyanawatte/Reuters)

Cash-strapped Sri Lanka on Sunday extended school closures for one week because there isn't enough fuel for teachers and parents to get children to classrooms, and the energy minister appealed to the country's expatriates to send money home through banks to finance new oil purchases.

A huge foreign debt has left the Indian Ocean island with none of its suppliers willing to sell fuel on credit. The available stocks, sufficient for only several days, will be provided for essential services, including health and port workers, public transport and food distribution, officials said.

"Finding money is a challenge. It's a huge challenge," Power and Energy Minister Kanchana Wijesekera told reporters.

He said the government has ordered new fuel stocks and the first ship with 40,000 metric tons of diesel is expected to arrive on Friday while the first ship carrying gasoline would come on July 22.

Several other fuel shipments are in the pipeline. But he said authorities are struggling to find $587 million US ($756 million Cdn) to pay for the fuel. Wijesekera said that Sri Lanka owed about $800 million to seven fuel suppliers.

Schools in urban parts of Sri Lanka have been closed for the past two weeks, and will remain closed for at least one more week, due to Sri Lanka's fuel shortage. A closed classroom is pictured at a government school in Colombo on June 20. (Ishara S. Kodikara/AFP/Getty Images)

Last month, schools were closed nationwide for a day due to fuel shortages and had remained closed for the last two weeks in urban areas. Schools will remain shut until Friday.

More nationwide power blackouts

Authorities also announced countrywide power cuts of up to three hours a day from Monday because they can't supply enough fuel to power generating stations. Sweeping power cuts have been a blight on Sri Lanka's economy for months, along with severe shortages of essentials including cooking gas, medicine and food imports.

Wijesekera said the main problem is the lack of dollars and appealed to some 2 million Sri Lankans working abroad to send their foreign exchange earnings home through banks instead of informal channels.

He said workers' remittances, which usually stood at $600 million per month, had declined to $318 million in June.

According to the Central Bank, the remittances — the nation's main foreign exchange earner — dropped from $2.8 billion in the first six months of 2021 to $1.3 billion in the same period this year for a decline of 53 per cent.

People wait to buy fuel at a fuel station in Colombo on June 27. Sri Lanka is appealing for expatriates to send money home to help buy fuel, as the country runs low on cash to pay for its fuel deliveries. (Eranga Jayawardena/The Associated Press)

The drop came after the government last year ordered the mandatory conversion of foreign currency. It said that black-market premiums have led people to hoard foreign currency.

Government seeks fuel from Russia

Sri Lanka's has been getting most of its fuel needs from neighbouring India, which provided it with a credit line. The government said it was also negotiating with suppliers in Russia and Malaysia.

Sri Lanka has suspended repayment of about $7 billion in foreign loans due this year out of $25 billion to be repaid by 2026. The country's total foreign debt is $51 billion.

The economic meltdown has triggered a political crisis with widespread anti-government protests erupting across the country. Protesters have blocked main roads to demand gas and fuel, and television stations showed people in some areas fighting over limited stocks.

In the capital, Colombo, protesters have been occupying the entrance to the president's office for more than two months to demand President Gotabaya Rajapaksa's resignation. They accuse him and his powerful family that included several siblings holding top government positions of plunging the country into the crisis through corruption and misrule.