COLOMBO: Sri Lankan energy companies said on Monday (May 9) they were running low on stocks of liquid petroleum gas mainly used in cooking, as shortages of foreign exchange put renewed pressure on the island nation.
Hit hard by the pandemic, rising oil prices and tax cuts by the populist government of President Gotabaya Rajapaksa, Sri Lanka has as little as US$50 million of useable foreign reserves, finance minister Ali Sabry said last week.
Shortages of fuel, which is mostly imported, food and medicines have led to more than a month of mostly peaceful anti-government protests, although Rajapaksa declared a state of emergency for the second time in five weeks on Friday.
State-run Litro Gas chairman Vijitha Herath told Reuters Sri Lanka's foreign exchange crisis was causing a severe gas shortage with the company struggling to find adequate dollars for payments.
"With the involvement of the President we will get US$7 million from the central bank to pay for a 3,500 metric tonne (MT) shipment, which is expected to arrive on Tuesday," he said.
Sri Lanka needs minimum 40,000 MT a month for gas, which at current prices costs about US$40m.
Long queues for cooking gas seen in recent days have frequently turned into impromptu protests as frustrated consumers block roads.
The second player in Sri Lanka's duopoly, Laugfs Gas, has less than 2000 MT of gas, which has been reserved for industries and hospitals. The company is also struggling to find dollars and is currently in talks to use its overseas assets to open letters of credit.
"We are a bankrupt nation. Banks don't have sufficient dollars for us to open lines of credit and we cannot go to the black market. We are struggling to keep our businesses afloat," Laugfs chairman WHK Wegapitiya said.
He estimated it would take at least another week for the company to secure a gas shipment.
On Monday, several hundred ruling party supporters rallied outside the official residence of Prime Minister Mahinda Rajapaksa, after reports in local media saying he may step down to alleviate pressure on the president, who is his younger brother.
"Whose power? Mahinda's power!" they shouted as the compound gates swung open to allow them inside.
Sri Lanka has approached the International Monetary Fund for a bailout, and will begin a virtual summit on Monday with officials from the multilateral lender aimed at securing emergency assistance.