COLOMBO (Reuters) – Sri Lanka is struggling to raise $ 587 million for nearly half a dozen fuel shipments, a top minister said on Sunday as the cash-strapped country struggled to cope with its worst financial crisis in decades.
The country of 22 million people is unable to pay for the import of essential food items, fertilizers, medicines and fuel due to the acute dollar crisis.
Power and Energy Minister Kanchana Wijesekera said new energy shipments were being lined up but the country was struggling to raise enough funds to pay because the central bank could only provide 125 125 million.
Sri Lanka has only 12,64 tonnes of diesel and 4,061 tonnes of petrol in government reserves, he told reporters in Colombo, the island’s commercial hub.
“We will need $ 316 million for new shipments this week. If we add two crude oil shipments, that amount would be up to $ 587 million,” Wijesekera said.
The first shipment of 40,000 tonnes of diesel from Coral Energy is expected to arrive around July 9, and a second partial payment of $ 49 million will have to be made from Vitel by Thursday.
Faced with severely limited diesel and petrol stocks, Sri Lanka closed schools last week, forcing government employees to work from home and restricting government fuel supplies to essential services.
The minister said the country should try to raise funds from the open market and look for more flexible payment options from suppliers.
Plans are in place to settle $ 800 million owed to seven suppliers for this year’s purchases, he said.
International Monetary Fund (IMF) officials will continue negotiations with Sri Lanka for a possible $ 3 billion bailout package, the global lender said after concluding a 10-day visit to Colombo last week.
However, immediate release of funds from the IMF is unlikely because the country first had to get its debt in a sustainable way.
(Reporting by Udita Jayasinghe, Editing by Roopam Jain, Editing by Ed Osmond)
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