Sri Lanka’s fuel crisis now turned bad to worse is to be tackled to certain extent with the arrival of eight ships carrying petroleum will arrive in the island next week and the introduction of a special pass to ration petrol and diesel usage
The Ceylon Petroleum Corporation (CPC) says that three ships each carrying between 30,000 and 40,000 metric tons of diesel will arrive in Sri Lanka on the 17th and 23rd of July.
Another two ships carrying petrol are also scheduled to arrive in the island next week. The CPCdisclosed adding that payment for all the shipments has already been made.
Lanka IOC, the Sri Lankan subsidiary of Indian Oil Corporation said that another three ships carrying fuel are also scheduled to arrive in Sri Lanka on those dates.
The agencies say that after the distribution of the fuel stocks, the current situation near the fuel stations will return to normal.
Even now, around one hundred tankers have been deployed for fuel distribution activities.
The Ceylon Petroleum Private Tanker Owners’ Association said with the receipt of the fuel stock, it is expected to distribute fuel 24 hours a day in collaboration with the Ceylon Petroleum Corporation.
Minister of Power and Energy Kanchana Wijesekera said steps have been taken to introduce a fuel dispensing program using a QR code as a solution to the fuel crisis and providing fuel to the public in an orderly manner.
National Fuel Pass was developed with the assistance of leading Tech companies in Sri Lanka and the Institute of Communication and Information Technology (ICTA) without any cost to Ceylon Petroleum Corporation (CPC) or the government, the Minister of Power and Energy Kanchana Wijesekera revealed.
The public can register on the website fuelpass.gov.lk to get the ‘National Fuel Pass’ but it has crashed after the launching but it is now under readustmenbts , ministry official said.
The program was launched with the technical support of the Sri Lanka Institute of Communication and Information Technology (ICTA) with the aim of easing fuel queues.
Accordingly, a person may register one vehicle under his National Identity Card Number, Passport Number or Business Registration Number. In addition, some other information such as name, address, phone number, used vehicle etc. should also be submitted.
The QR code obtained after registration must be presented to get fuel. The QR code can be saved as a screenshot on one’s mobile phone. Those without a smartphone can keep a printout of the QR code with them.
The minister emphasized that this is the only permit given by the government to the people to buy fuel not only from Ceylon Petroleum Corporation petrol stations but also from Lanka IOC petrol station
Govt to tackle fuel crisis with the arrival of 8 fuel ships and fuel pass issuance
Ex- President in exile Gotabya Rajapaksa pledges to continue to serve Sri Lanka
Former President Gotabya Rajapaksa in exile says he will continue to serve Sri Lanka following his resignation as President.
He made this pledge in his resignation letter which was read out in Parliament yesterday.
Sri Lanka’s ousted president, who fled overseas this week to escape a popular uprising against his government, has said he took “all possible steps” to avert the economic crisis that has engulfed the island nation.
The President said that he was satisfied with efforts taken to protect Sri Lanka from the pandemic at that time.
He further said that by enforcing lockdowns in 2020 and 2021, the country lost foreign exchange and the economy, which was already suffering, took a hit.
Rajapaksa said that he had invited all the political parties to help form an all-party Government to address the crisis and took all the required steps in this regard.
Gotabaya Rajapaksa said that following a request made by political part leaders and the public, he had decided to step down from his post with effect from 14th July 2022.
The former President also said that he will continue to serve the country of his birth as he has done in the past.
Gotabaya Rajapaksa’s resignation was accepted by parliament on Friday. He flew to the Maldives and then Singapore after hundreds of thousands of anti-government protesters came out onto the streets of Colombo a week ago and occupied his official residence and offices.
Sri Lanka’s parliament met on Saturday to begin the process of electing a new president, and a shipment of fuel arrived to provide some relief to the crisis-hit nation.
Dhammika Dasanayake, the secretary general of Sri Lanka’s parliament, formally read out Rajapaksa’s resignation letter, the contents of which had not previously been made public.
In the letter, Rajapaksa said Sri Lanka’s financial crisis was rooted in years of economic mismanagement that pre-dated his presidency and in the COVID-19 pandemic that drastically reduced Sri Lanka’s tourist arrivals and remittances from foreign workers.
“It is my personal belief that I took all possible steps to address this crisis, including inviting parliamentarians to form an all-party or unity government,” the letter said.
Parliament will next meet on Tuesday to accept nominations for the post of the president. A vote to decide the country’s leader is set to take place on Wednesday.
Prime minister Ranil Wickremesinghe, an ally of Rajapaksa who is the sole representative of his party in parliament, has been sworn in as acting president until then.
Wickremesinghe is one of the top contenders to take on the role full-time but protesters also want him gone, leading to the prospect of further unrest should he be elected.
The opposition’s presidential nominee is Sajith Premadasa. The potential dark horse is senior ruling party lawmaker Dullas Alahapperuma.
SL billionaire Raj Rajaratnam now out of Jail eyes for next big trade
Sri lankan billionaire businessman Raj Rajaratnam who served a jail term of 11 years in the US for insider trading is ready to embark on his next big trade after resuming his business inside the townhouse in Manhattan’s East 50s.
With about 18 people working or consulting for his family-office firm — the name “Synamon” echoes the spice most associated with his native Sri Lanka — he’s trading stocks, investing in real estate, whatever catches his eye. .
Whether Rajaratnam can pick himself up after such a spectacular fall is anyone’s guess. But he still has the money to try. The year was arrested, Forbes estimated he was worth $1.3 billion. He says legal fees and fines cost him $200 million. As for what he’s worth today? “Subtract that from whatever number you think I had,” he says with a laugh.
It’s been three years since the former hedge-fund magnate was freed from FMC Devens, the medical prison west of Boston where he did time with Ponzi schemer Nicholas Cosmo, AKA, the “mini-Madoff”, among others.
In his heyday at his multibillion-dollar Galleon Group LLC, computer screens crowded his huge, curved desk, monitoring markets around the globe. Here at Synamon Global LLC, Rajaratnam works at a utilitarian glass-topped table that looks as if it might’ve come from Ikea
His company specialized in technology and healthcare, waters Rajaratnam is still plying today. Synamon’s investments include companies in medical technology, cloud computing, cybersecurity and clean energy, including electric vehicles.
Its real estate investment business is buying residential properties in New York and in 10 states across the South, he says. His employees include recent college students who are working for him as analysts. The US staff is spread among New York, Pittsburgh and San Francisco. A team in Sri Lanka covers e-commerce.
Government authorities called Rajaratnam “a billion-dollar force of deception and corruption on Wall Street.” Tapping a network of informants across swaths of corporate America, he illegally used inside information to trade stocks such as Goldman Sachs Group Inc., Google, Intel Corp. and Hilton Worldwide Holdings, prosecutors said. His trading generated profits or avoided losses of $72 million, not quite $10 million for each year he served in prison.
The explosive case exposed the trafficking in illicit information at the highest echelons of American finance. Roughly a hundred other people were eventually ensnared by insider trading cases. Most pleaded guilty or, like Rajaratnam, were convicted by a jury.
Among those who went to prison were Rajat Gupta, former global head of McKinsey & Co. and former board member for Goldman Sachs, who blamed Rajaratnam for his downfall.
Sri Lanka’s merchandise exports in May surpass US$.1 billion
Earnings from merchandise exports in May 2022 increased substantially by 17.5% over the corresponding month in 2021, recording at $ 1,047 million, Central Bank announced.
An increase in earnings was observed in industrial exports, while a decline was recorded in agricultural exports and mineral exports.
The cumulative export earnings during January-May 2022 increased by 12.2% over the same period in the last year, amounting to $ 5,266 million.
Earnings from the export of industrial goods increased in May 2022 by 24.2%, compared to May 2021. A broad-based increase in earnings among industrial goods has been recorded, with the greatest share for the overall increase mainly being contributed by garments.
Export of garments to all major markets (such as the United States, the European Union and the United Kingdom) improved.
Further, gems, diamonds and jewellery and petroleum products also contributed to this increase in exports. Earnings from the export of petroleum products improved due to the increase in both average export prices and volumes of bunker fuel exports.
Meanwhile, continuing the lower demand for rubber gloves as a personal protective item due to declining spread of COVID-19 worldwide, a decline in earnings was reported in rubber products. Export earnings from animal fodder and plastics and articles also declined during the month.
Total earnings from the exports of agricultural goods in May 2022 declined by 4.2%, compared to May 2021.
This decline was mainly attributed to exports of tea, spices, unmanufactured tobacco and vegetables. Export earnings from tea in May 2022 declined by 14.2% (year-on-year), due to the decline in volume of tea exported.
Earning from spices declined by 16.2% in May 2022 due to lower export volumes of spices, except cinnamon. However, the export of subcategories of minor agricultural products (primarily, arecanuts), coconut related products (primarily, fibres and coconut oil), seafood and natural rubber recorded an increase in May 2022, compared to the previous year.
Earnings from mineral exports in May 2022 declined by 58.4%, compared to May 2021, mainly due to a decline in export earnings from titanium ores categorised under ores, slag and ash.
The export volume index and unit value index increased by 13.7% and 3.3%, respectively, (year-on-year), in May 2022, indicating that the increase in export earnings can be mainly attributed to the higher export volumes.
Sri Lanka’s merchandise exports in May surpass US$.1 billion
Earnings from merchandise exports in May 2022 increased substantially by 17.5% over the corresponding month in 2021, recording at $ 1,047 million, Central Bank announced.
An increase in earnings was observed in industrial exports, while a decline was recorded in agricultural exports and mineral exports.
The cumulative export earnings during January-May 2022 increased by 12.2% over the same period in the last year, amounting to $ 5,266 million.
Earnings from the export of industrial goods increased in May 2022 by 24.2%, compared to May 2021. A broad-based increase in earnings among industrial goods has been recorded, with the greatest share for the overall increase mainly being contributed by garments.
Export of garments to all major markets (such as the United States, the European Union and the United Kingdom) improved.
Further, gems, diamonds and jewellery and petroleum products also contributed to this increase in exports. Earnings from the export of petroleum products improved due to the increase in both average export prices and volumes of bunker fuel exports.
Meanwhile, continuing the lower demand for rubber gloves as a personal protective item due to declining spread of COVID-19 worldwide, a decline in earnings was reported in rubber products. Export earnings from animal fodder and plastics and articles also declined during the month.
Total earnings from the exports of agricultural goods in May 2022 declined by 4.2%, compared to May 2021.
This decline was mainly attributed to exports of tea, spices, unmanufactured tobacco and vegetables. Export earnings from tea in May 2022 declined by 14.2% (year-on-year), due to the decline in volume of tea exported.
Earning from spices declined by 16.2% in May 2022 due to lower export volumes of spices, except cinnamon. However, the export of subcategories of minor agricultural products (primarily, arecanuts), coconut related products (primarily, fibres and coconut oil), seafood and natural rubber recorded an increase in May 2022, compared to the previous year.
Earnings from mineral exports in May 2022 declined by 58.4%, compared to May 2021, mainly due to a decline in export earnings from titanium ores categorised under ores, slag and ash.
The export volume index and unit value index increased by 13.7% and 3.3%, respectively, (year-on-year), in May 2022, indicating that the increase in export earnings can be mainly attributed to the higher export volumes.
Why can’t we solve the fuel problem the way Greece solved it?
The fuel crisis has had an extremely serious impact on people’s lives by now. Government employees are restricted from being summoned to offices. Schools are not held. Vegetable farmers have not been able to send their crops to economic centers. The tea industry is in a serious problem as it is not possible to send the tea leaves to the tea factories every day. Even the shelves of shops in distant areas away from Colombo are slowly becoming empty because the transportation of goods from Colombo is limited.
If we have to continue in this way, there is a possibility that many industries such as agriculture and businesses in the country will completely collapse. Hospitals may not even be able to transport the necessary medicines. The number of hours of daily power cut has increased so much that it is impossible to come to a point where the entire country will stop. Depending on the way things are developing, the day is not far when a pregnant mother who is about to give birth cannot find a vehicle to go to a hospital, and the patient cannot be taken to a hospital in case of an emergency snake bite.
It is true that several fuel ships are due to arrive in Sri Lanka this week. But it is also true that in the long term, there is no sign of a solution to this fuel crisis.
It is a well-known fact that this fuel crisis is caused by the lack of foreign exchange that we are facing as a country. Most of the country’s monthly import expenditure is allocated to the import of fuel.
What Greece did…
Greece, just like us, is a country that has faced a foreign exchange crisis before us. There they wanted to reduce their fuel demand by 50%. What they did was, they increased fuel prices by 50%. Accordingly, the price of a liter of petrol in Greece is 2.35 US dollars (857 rupees). A liter of diesel costs US$ 2.02 (Rs 737).
With the extra money received by the government through this price increase, they arranged to provide diesel at subsidized rates for public transport. Through that, they were able to reduce public transport fares by 10% compared to the amount before the arrival of the Covid epidemic situation.
Now there are no fuel queues in Greece. Relief has also been provided to the public due to the reduction in public transport fares. Also, foreign tourists are coming to Greece and foreign exchange inflows are also increasing.
It is stated that through the above program they have been able to reduce fuel demand by 43%.
Why can’t SL do that?
Considering the situation in Sri Lanka, according to the current monthly income, we have enough money to bring fuel for about 15 days. Accordingly, we also have to reduce fuel demand by 50%. We will also be able to reverse this situation when the country starts receiving foreign exchange income through the tourism industry.
But the question is why the authorities do not directly announce this situation to the people and go to a solution like Greece.
China to provide US $4 billion aid for Sri Lanka “at some point”: envoy Kohona
Sri Lanka is continuing negotiations with China for as much as US$4 billion in aid and is confident Beijing will agree “at some point,” according to a top envoy.
Colombo is asking China for a loan of $1 billion to repay an equivalent amount of Chinese debt coming due this year, Palitha Kohona, Sri Lanka’s ambassador to China, said in an interview to Bloomberg Television Friday. It is also seeking a $1.5 billion credit line to pay for Chinese imports and activation of a $1.5 billion swap, he added.
“We are confident that at some point the Chinese system will agree to our requests because these are not unreasonable requests,” Kohona said. “We have made similar requests to other creditors. Sri Lanka needs the funding to bring stability to our financial system and we are confident that the Chinese will come to the party sooner than later.”
The bankrupt South Asian country has received about $3.8 billion in aid from neighbor India, and is negotiating for more. The cash is needed to pay for food and fuel purchases, with severe shortages seen stoking inflation to 70%, triggering violent public protests and forcing President Gotabaya Rajapaksa to flee the nation and resign.
Sri Lanka’s federal government has about $12.6 billion in outstanding bonds owed to global funds; all repayments are frozen and defaults have been recorded. It owes roughly an equivalent amount to bilateral creditors and multilateral lenders.
Some 10% of Sri Lanka’s external debt is owed to China, Kohona said. Acting President Ranil Wickremesinghe had told Bloomberg News earlier that Japan is owed roughly an equal share but the interest rates on Chinese loans are higher. Wickremesinghe is seeking a bailout from the International Monetary Fund.
India has urged the IMF to treat all of Sri Lanka’s creditors on par. China is concerned about potential delays in repayments if the agreed $1.5 billion swap is included in IMF talks, Sri Lankan authorities have said. Kohona declined to say if China will permit Sri Lanka to tap the swap but said this line won’t be included in IMF talks.
Kohona on Friday said Sri Lanka’s relationship with “close, vital neighbor” India isn’t dependent on the island’s “warm, proximate” relationship with China. He added that China-Sri Lanka relations will survive the departure of Rajapaksa, who was seen as close to Beijing.
“The president has gone, but in the coming weeks we will decide on a successor,” Kohona said. “What we went through was a popular uprising, a popular expression of disenchantment. The people have expressed themselves.”
IMF calls for political stability in Sri Lanka to resume talks
The International Monetary Fund (IMF) is calling for political stability in Sri Lanka in order to resume key talks on bail out loan to rescue the island nation from the balance of payment crisis.
The IMF is still in contact with officials at technical levels within the Sri Lankan government and hopes to be able to resume discussions with higher-level officials, an IMF spokesman said on Thursday, after Sri Lanka’s president announced his resignation.
“We hope for a resolution of the current situation that would allow for our resumption of a dialogue on an IMF-supported program,” IMF spokesman Gerry Rice said in a scheduled press briefing.
Sri Lankan President Gotabaya Rajapaksa sent a resignation letter on Thursday after fleeing to Singapore. He had first fled to the Maldives on Wednesday to escape a popular uprising over his family’s role in a crippling economic crisis.
Rice said the IMF still has technical counterparties in Sri Lanka’s Central Bank and the Ministry of Finance and hopes to be able to have high-level discussions with the authorities to begin discussions on a program “as soon as possible.”
He said any new loan program for Sri Lanka would require adequate assurances on debt sustainability.
Clifford Lau, a money manager at William Blair, a holder of Sri Lankan bonds, said it was difficult to say when a deal could be reached with the IMF because the country needs to rebuild its government.
“I still believe that an IMF deal will eventually happen as there is the consensus amongst the political elites that it is the most credible way forward to restore confidence from within and outside,” Lau said. “What needs to stop now is the political infighting, and elect an all-parties leader to resume bailout talks as soon as possible.”
IMF Spokesperson Gerry Rice noted that the crisis in Sri Lanka has interrupted the ongoing talks with the IMF.
“So, like everyone else we are, of course, deeply concerned about the ongoing crisis, it’s impact on the Sri Lankan people, and particularly the poor and the vulnerable groups in Sri Lanka and closely monitoring the political and the social developments there,” Rice told reporters.
He said the IMF hopes for a resolution of the current situation that would allow for the resumption of a dialogue on an IMF supported program.
“He added that that in June, less than a month ago, things are moving so fast, but less than a month ago there was an IMF staff team in Colombo.
And we did have discussions, actually, constructive discussions with the authorities on a set of economic policies and reforms that could be supported by, potentially by an IMF program. We don’t have a program with Sri Lanka right now. But we were discussing what could be a program,” he said.
Rice also said that Sri Lanka’s public debt is assessed as unsustainable and as is the case with every IMF program, not just the case of Sri Lanka, a program would require adequate assurances on debt sustainability.
SL manufacturing and service sectors suffer set back in political turmoil
Sri Lanka’s manufacturing and service sectors have been greatly affected by the current political turmoil which has brought the country’s day today activities to a standstill further aggravating the economic crisis
Manufacturing sector has been paralyzed due to power cuts , fuel shortage and mass uprising and its functions declined in June 2022, indicating a setback in manufacturing activities on a month-on-month basis.
This was driven by the decrease in all the sub sectors except Suppliers’ Delivery Time. New Orders declined particularly in the manufacturing of food & beverage sector partly due to the deterioration of purchasing power amidst the high inflationary environment.
Many export-oriented manufacturing firms also witnessed lower than anticipated orders as foreign buyers are worrying over the fragile political and economic condition prevailing in the county and possible disturbances to order fulfillment.
The decline in Production levels in June 2022 over the previous month was mainly because of the shortage of materials and ongoing energy shortage.
Scarcity of fuel affected the Production directly, as well as indirectly through difficulties in transportation. Moreover, the Employment sub-index recorded a decline on a month on-month basis, particularly in the manufacture of food & beverage sector.
The Stock of Purchases declined mainly due to the unavailability of required quantities in the domestic market and difficulties in opening letters of credit for importing materials.
The Suppliers’ Delivery Time further lengthened during the month at a higher pace, mainly on account of delays in clearance of imported goods, COVID-related lockdowns in China, vessel delays, and diesel shortage that affected domestic transportation.
For the next three months, the overall expectations for manufacturing activities continued to deteriorate compared to the previous month due to the prevailing uncertain economic environment in the country, supply-side constraints and possible weakening of external demand.
Service sector came to a standstill further indicating a contraction in services activities for the third consecutive month.
This was due to the declines in New Businesses, Business Activities, Employment and Expectations for Activity sub-indices.
New Businesses declined further in June 2022 compared to May 2022, particularly with the decreases observed in transportation, accommodation, food and beverage and education sub-sectors.
Continued supply-side constraints including acute fuel shortages led Business Activities in the services sector to decline further in June.
Moreover, many respondents highlighted that the subdued consumer spending amid the high inflationary pressures, rising interest rates, transportation related issues and pessimism on economic outlook further weakened the demand, particularly related to discretionary items.
In the light of these circumstances, other personal activities, transportation, wholesale and retail trade, accommodation, food and beverage and education sub-sectors recorded sharp declines during the month.
Maithri says that if there is no specific program, the SLFP will not vote!
The Sri Lanka Freedom Party has decided not to vote for any candidate in the presidential election to be held in Parliament on the 20th unless a specific program is presented to relieve the people from the oppressive conditions they are facing.
Its chairman, former President Maithripala Sirisena, emphasized that at a press conference held in Colombo today (16).
Also, the former president said that after being appointed as the president, there is a need for a clear and firm statement that an all-party government will be formed in the constitution that is in a democratic framework.
Acting President decides to implement an urgent relief program to provide fuel, gas, and essential food
Acting President Ranil Wickremesinghe has decided to implement an urgent relief program to provide fuel, gas and essential food items to the public who are struggling due to the economic pressure.
He has taken this decision following discussions held with Ministers and Members of Parliament this morning (16).
In addition, it has been decided to use additional money for this from the relief budget that will be presented in August.
In that discussion, the Acting President advised to speed up the implementation of the food security program.
Special attention was paid here to provide fuel and fertilizers regularly and promptly.
Also, during this discussion, plans have been made to prepare the necessary environment for businessmen to run their business without any hindrances.
Meanwhile, Acting President Wickremesinghe said during the discussion that the plan handed over by the peaceful protesters has been recognized as a good plan.
The Acting President further said that he will inform the activists about the measures being taken to fight corruption.
Prime Minister’s Media Division
16th July 2022