The Ministry of Power and Energy has reportedly suspended the supply of fuel to the Fuel Filling Station in Kesbewa.
The decision comes in following an incident where a fuel bowser that was being taken to a shed in Polgasowita was diverted to Kesbewa fuel shed and unloaded.
Following an investigation, the Ministry has decided to temporarily suspend the supply of fuel to the Kesbewa Filling Station. Accordingly, the Station’s management has displayed that it will not issue fuel until further notice.
Subject Minister Kanchana Wijesekara recently told media that the supply of fuel will be suspended if any incident of sabotage is reported in a shed.
“Right now, the problem of inflation cannot easily be solved by tightening the interest rates. It can be tightened in some cases, the government is trying to do it in the case of wheat by putting an export ban,” says Swaminathan Aiyar, Consulting Editor, ET Now.
How real is the fear of the rising rates and the slowing growth which is making the markets of the world very nervous? We are at the highest rate of inflation – some people will say for five years, for ten years, for fifteen years. The wholesale price index for April had just come in at 15:05%. The consumer price index 7.8%. These are extraordinarily high rates and there is nothing special about India.
In America, where the target inflation is 2%, their latest inflation rate came down a little to 8.3%. So there is global inflation. Prices of commodities of all kinds, prices of services, manufacturing and everything has been going through the roof in the last 12 months. The inflation had begun even in 2021 and then after the Ukraine war started in February, it accelerated even more.
So the world is caught in a huge inflationary trap right now with the physical shortage of a large number of commodities which was building up over time and over and above those physical shortages, there has been the shock of the war and the sanctions imposed on Russia which is an important supplier of a number of items.
The Black Sea which is one of the greatest supply routes out of Russia and Ukraine that has been blocked by the war. On top of everything else, China has committed a kind of hara-kiri by having a complete lockdown in an attempt to stamp out Covid and so on its own, there is a separate supply shock because there is no production going on in China.
So these different strands have all come together for a gigantic shock. Two things are happening at the same time; on the one hand, demand is going down because there is a lack of production. There is a lack of production as the prices have gone up and China has got into a self-made recession; it’s a hara-kiri recession of its own. Meanwhile, with the prices going up, all the central banks are having to raise their rates.
So we are in a situation where on the one hand there is a recessionary trend, recession is coming because demand is falling. At the same time, prices are going up. Some people call this stagflation. In the case of India, we are hit both ways. We were hoping that it would be a very good year for growth, the IMF was saying India will be the fastest growing major country and perhaps that will still be the case, but earlier they were hoping for 9% growth and now people say maybe 7%, 7.5%, or maybe 6%.
We are in a tough position right now as the inflation is rising fast because inflation is rising everywhere else in the world and because of that we cannot escape it alone and the recessionary trend is also coming the world over and we cannot escape that. We are perhaps better positioned to withstand the problem that some other countries can’t. We will not collapse like Sri Lanka or Pakistan but we are certainly in trouble.
Do you think the situation is in control of the central banks and can they control inflation by just raising the rates? Raising interest rates is not going to solve the supply problem. If there is an overheated economy with too much demand, then one can slow down that demand by raising interest rates and making it difficult for people to buy. But that is not the case today. It is not like we have an overheated economy and there is too much demand. In fact, there is not enough demand. Take a look at the corporate sector. The results that are coming in show the auto sector is not in good shape, demand is not there therefore the production is coming down.
There is a shortage in some areas like metals and so on but even there, the prices have come down very sharply. So right now, the problem of inflation cannot easily be solved by tightening the interest rates. It can be tightened in some cases, the government is trying to do it in the case of wheat by putting an export ban. The international price of wheat is something like Rs 40 a kilo and if we freely allow the export of wheat from all our surplus buffer stocks, we can have a huge export boom but then if the Indian price equates with the world price at Rs 40 a kilo, there will be mayhem and riots on the streets.
SO the government has tried to do supply management by saying we will stop all exports of wheat. This I think was a bad move. It should have been more gradual and they should be allowing some exports but right now that is one thing that they can do. They have put a ban to improve the supply of wheat and this can help to reduce inflation on that front. Beyond that, we will have to live with the global trends and cannot wish away the global trends.
The government up to a point can reduce import duties or excise duties on edible oil. It can do that in the case of crude oil, petrol, diesel. But all this would be a limited amount of relief. It is not that prices will come down but one can limit the extent to which the prices rise.
Beyond that, we will have to wait for this war to play out and for this business cycle to play out, those are items beyond your control.
Despite the willingness to support the new Ranil Wickremesinghe-led government, the Sri Lanka Freedom Party’s (SLFP) made it clear that it will be accepting any ministries or titles in the new administration.
However, among the recent Cabinet appointments was SLFP MP Nimal Siripala De Silva, who avoided the Party’s standpoint and accepted a ministerial position in the Ranil-led regime.
Reportedly, more SLFP MPs are to be sworn in as ministers in the government going against the Party’s decision. Accordingly, MPs Mahinda Amaraweera, Duminda Dissanayake, Lasantha Alagiyawanna, Jagath Pushpakumara and Chamara Sampath Dasanayake are prearing to directly support the Ranil-led regime, in breach of the Party’s viewpoint.
Mahinda Amaraweera is believed to be given a Cabinet Ministry and the other four, state ministries, according to sources.
The Department of Natural Sciences at the University of Agder (UiA) is working to introduce a more environmentally friendly solution for Sri Lanka to replace petrol as there is a great demand for fuel in the crisis hit island nation ” scientist Alfred Christy of the University said.
He and his colleague Souman Rudra from the Department of Engineering Sciences at UiA are working together with colleagues at the University of Jaffna to develop a product that can be used in the engines of the typical three-wheelers in Sri Lanka.
“In Sri Lanka and neighbouring countries, there are many motorised three-wheelers, also called rickshaws. From an environmental point of view, it is important to get the engines of these vehicles over to a more environmentally friendly fuel,” Christy says.
Renewable and more environmentally friendly fuels are often called biofuels and are made from biological material. The product the researchers are developing is a plant-based oil mixture consisting of bioethanol and castor oil.
Bioethanol is produced from corn or sugar cane, while castor oil is obtained from the seeds of the castor plant and is extracted by cold pressing. The mixture has been named ‘Casahol’
“What we see is that these two products together provide a lubricating oil with unique properties,” Christy says.
Research colleagues at the University of Jaffna recently conducted the first tests on a four-stroke motorcycle engine.
“The biofuel burned completely, and the oil mixture provided the lubrication the engine needs so as to avoid damage. This makes us optimistic about the development,” Christy says.
Both Christy and Rudra are pleased with the positive results from the first phase of the project. In the autumn, two students from Jaffna, Sri Lanka, will come to UiA to continue working on the biofuel project.
“The students are already involved in the project in Sri Lanka and are coming here to explore it further,” Christy added
The students will be at UiA for three months. Christy and Rudra plan to research and test the oil mixture on various engines here in Norway. Both snowblowers and lawn mowers in Norway have similar engines to the three-wheelers in Sri Lanka.
When the students return, they can transfer the skills and knowledge gained and the method used and continue the testing on Sri Lanka’s rickshaws. The project goal is also to commercialise the product they develop. According to Christy, there are great opportunities for commercial partners.
Sri Lanka is facing a severe food shortage as authorities are yet to find solutions to the food shortage citing the dollar crisis as the reason behind not being able to find a solution to the issue.
Very soon there will be no food items in the market for people to buy. Even now there are some essential food items which are not found in the market because of the lack of dollars which is needed to release the imported food stocks stored in vessels stuck at the port. People are forced to live amidst these problems, local market sources revealed.
A meal of fish and rice has become a luxury for the average Sri Lankan family eager to maintain a diet rich in animal protein.
Diesel for fishing vessels is now more costlier and so is fishing gear, largely imported. These rising costs for the fishing industry mean, the catch brought ashore is limited and prices keep rising at the wet markets and in supermarkets.
“We are waiting for the new government to look into our plight. The fuel price increase and the shortage of diesel are frustrating. Many are not going out to sea,” complains Dinesh Suranjan Fernando, the secretary of the All Ceylon Fisher Folk Trade Union.
We spend days waiting for diesel and then leave disappointed. Some pay a higher price to get diesel. So the catch needs to bring in more value. Even the cheapest saalaya (sardine) is sold for Rs. 90 a kilo is now Rs. 300.’’The rise in prices of fishing equipment adds to the landed cost of fish.
“Fishing nets that were Rs. 65,000 earlier now cost Rs. 120,000. Outboard engines that were sold for Rs. 250,000 each are now Rs.500,000. Most of the equipment is imported from Thailand, India and Taiwan,’’ a fisherman said.
According to Department of Fisheries statistics the annual marine fish production is 415,490 metric tons. The country has a marine fleet of 48,976 including 4,885 multi-day trawlers. With 64,000 marine fishing households, 2.7 million people depend on fishing and related livelihood in the country.
The price of deep sea fish such as snapper, tuna, seer fish (thora), paraw, thalapath (sailfish) continue to soar. A kilo costs Rs.1,700 to Rs 2,200 in the wet market. In supermarkets, the price range is Rs. 2,300 to Rs 3,000 per kilo.
Some families say they buy the costlier fish for special occasions, while resorting to Indian mackerel, linna or saalaya for a daily meal.
There is a scarcity of certain essential food items already such as garlic, onions, mung beans, cowpea, chickpeas, dhal, coconut oil, milk powder, dried fish, fish, meat varieties, corn, wheat flour and rice. E
Even if they are imported, given the prevailing dollar crisis, their prices keep increasing daily. A kilo of mung beans is 1000 rupees whereas rice costs more than 200 rupees a kilo. Coconut oil costs around 800-1000 rupees and a kilo of dhal has increased to 600 rupees.
A kilo of imported milk powder costs around 2000 rupees. With the recent price hike of wheat flour, a loaf of bread costs 150 rupees. The problem however is the lack of essential food items despite price hikes.
Traders and importers increase prices of food items daily claiming that the rupee has depreciated against the dollar. The Consumer Affairs Authority (CAA) and the responsible state authorities turn a blind eye to these matters.
There is a scarcity of food items in shops around the country. People are queuing up in search of food. The concession package of essential food items given for the new year through Sathosa did not contain the food items people needed. Against this backdrop a severe scarcity of essential food items IS now prevailing heavily.
Cassandra is a proud migrant, a pastry chef, an advocate for essential workers and the Federal Labor Candidate for Holt.
She came to Australia with her family when she was 11, and she has called Melbourne’s South-East home ever since.
Having made this journey, her parents taught her to never take anything for granted and instilled three values that she has upholds to this day: hard work, commitment and gratitude.
Her parents taught her that she was entitled to a fair day’s wage for a fair day’s work as well as the importance of being committed to the community.
She began working at Woolies Dandenong Plaza as a teenager, and spent almost 15 years baking, stacking shelves and making lifelong friends.
She now represents workers in the retail and fast food industries, fighting to improve the pay and conditions of my former colleagues—essential workers who have worked tirelessly throughout the pandemic.
She has also volunteered to tutor migrants and refugees from non-English speaking backgrounds so they can make the best of every opportunity.
Her parents also taught her to be grateful—to her community and to Australia—and never miss an opportunity to repay the gratitude.
She decided to become the Candidate for Holt because she knew that only a Labor Government can deliver a better future for Holt—a future in which families like hers are not held back or left behind.
The Government of India has decided to reduce the tax rate on fuel to control rising inflation. Accordingly, the price of a liter of petrol has been reduced by 9.50 Indian rupees and the price of a liter of diesel by 07 rupees.
Indian Finance Minister Nirmala Seetharaman says the reduction in fuel prices will cost the Indian government a trillion rupees.
Meanwhile, relief has also been provided to gas consumers. Accordingly, Indians will be able to purchase 12 gas cylinders at a concession of Rs. 200 per year.
The Indian government will lose 61 billion Indian rupees as a result of this subsidy.
The house of the owner of an IOC filling station in the Ipalogama area in Kekirawa has been set on fire by a group last night (21).
According to the Ipalogama Police, a group who had gone to the filling station to obtain fuel had become angry after running out of fuel and had set fire to the owner’s house.
The house was set on fire in the Ipalogama Thilakapura area. The fire had started when the power supply was cut off last night and it is said that the wife and two children of the filling station owner were at home at that time.
Neighbors and police put out the fire and it was reported that all the books of the two school children had been destroyed by the fire and one of them was scheduled to sit for the GCE Ordinary Level examination this time.
Once known for its dynamic food, music and culture, Lebanon is now in the midst of the worst economic crisis in modern history. With no clear resolution in sight, the country is experiencing rolling blackouts, a shortage of food and a monthly inflation rate of 56%. The Lebanese Lira joins a list of dozens of failed fiat currencies including the Venezuelan Bolivar, the Zimbabwean Dollar and Argentinian Peso.
TOPSHOT – A protester holding the Lebanese flag runs as protesters block the Jounieh Tripoli highway … [+] AFP VIA GETTY IMAGES
A small middle-eastern country with a population of only 5 million, Lebanon takes pride in its emigrant community with countless families in Canada, U.S. and Britain. The Lebanese diaspora is estimated to be about three times the size of the Lebanese population back home.
Many expats were able to find success abroad, bringing pride to Lebanon. Some notable Lebanese figures include writer Nassim Nicholas Taleb, barrister Amal Clooney, actress Salma Hayek, singer Shakira, billionaire Carlos Slim and former Chairman of Fox Broadcasting, Lucie Salhany. Each year, Lebanese expats visit their homeland and infuse billions of dollars to keep the economy liquid.
An Import-Based Economy
In 1997, the Central Bank of Lebanon pegged the Lebanese Lira to the U.S. dollar at 1507 to 1. Over the last two decades, the stability of the Lebanese economy depended on a fixed exchange rate to the U.S. dollar.
Currency stability encouraged expats to continue to send money home, buy property and even deposit cash in local banks. It is estimated that Lebanese abroad sent remittances worth up to 12.5% of Lebanon’s GDP, keeping the economy afloat. The dollarization of Lebanon contributed to its growing wealth divide, where Lebanon’s top 1% earned 25% of the country’s GDP, making it one of the most unequal economies in the world.
Lebanese Banking System
Revenue into Lebanon began to dry up due to upheaval in neighboring Syria, which pushed officials to engage in creative financial engineering to keep the Lira stable. To maintain an illusion of stability and incentivize deposits, banks offered interest rates as high as 14%, which in turn required more deposits to pay the high interest rates, creating a Ponzi scheme.
It took a while for people to notice the scam, however. Entering 2019, pressure on the Lira-Dollar peg continued to increase. Riad Salameh, head of the Central Bank of Lebanon, issued an order requiring all money transfer offices, such as Western Union and MoneyGram, to pay cash out in Lira rather than dollars, even where transfers were specifically denominated in dollars. This was the first red flag of a looming currency crisis.
Lebanese protesters gather outside a money transfer service provider calling on him to close his … [+] AFP VIA GETTY IMAGES
Over the next few months of 2019, the demand for dollars continued to rise. Currency exchange booths and banks had an influx of retailers and individuals wanting to buy dollars. Merchants also needed larger amounts of dollars to cover imports, putting additional pressure on the peg.
Since the Lira was officially pegged at 1507 to 1, a black market for dollars began to form, allowing purchases of dollars at a higher price. But this was still the calm before the storm.
In August 2019, Fitch downgraded Lebanon’s credit rating from B- to CCC. A few weeks later, Jammal Trust Bank was forced to liquidate itself after being hit by U.S. sanctions for allegedly helping to fund Hezbollah. The bank had 25 branches in Lebanon, creating a huge blow to the Lebanese banking system. In the background, Lebanon started printing more Lira, but many had not yet noticed.
Protests
On October 17th, 2019, protests were set off by a proposed tax on WhatsApp phone calls. This was ‘the straw that broke the camel’s back’, as the protests were fundamentally about decades of corruption as well as Lebanon’s sectarian political order.
TOPSHOT – Lebanese demonstrators raise a new giant sign of a fist that bears the Arabic word … [+] AFP VIA GETTY IMAGES
Lebanon’s political system is a complicated balance of power sharing and sectarian quotas for the country’s various religious groups consisting of Shia and Sunni Muslims, Druze, and several Christian groups. The formula and quotas to maintain peace between these different groups extend to everything from allocation of public funds to entry-level jobs. This system prolonged a divisive atmosphere in Lebanon, making it a battleground for many of the ideological conflicts of the Middle East.
For a first-hand account, I sat down with Lebanese-Canadian actress Sarah Himadeh, who by a twist of fate became one of the leading activists during the protests last year. Her family originally fled Lebanon during the 80s. She recounts her experience of the protests:
“I was visiting my sick grandmother back in Lebanon last October and the protests started the day before I was supposed to head back to LA. I knew that this was a transformative moment for my country and there was no way I was going to leave. There was no way I wasn’t going to stand for my country, there was no way I wasn’t going to stand for a unified Lebanon. They say October 17th 2019 is the official date of the end of the civil war, because this was the first time we, all the Lebanese, from all factions came together. Martyr Square in Beirut was the most inspired and inspiring place in the world that day. And for months to follow. I’ll never forget it.
The Lebanese diaspora don’t necessarily want to be scattered all over. We don’t necessarily want to live in Toronto, New York, LA, London, Paris or Dubai. We want to live in the Lebanon we all long for. In its mountains, and on its shores. In an incorruptible and secular Lebanon. That’s where we want to live. And that’s what we were fighting for.”
Sarah Himadeh and friends in Martyr Square protesting for Lebanon. SARAH HIMADEH
Peaceful protests continued for months. The government cut power almost daily to its communities, but the Lebanese spirit could not be tamed as protesters danced in the streets. Lebanese Prime Minister Saad Hariri resigned, but the people wanted more sustained change.
Protests were eventually paused by the COVID-19 pandemic. Although quarantine provided some much needed relief from the streets, it further exacerbated the economic conditions in Lebanon. Many emerged from quarantine with no job prospects and no funds to buy necessities. As Lebanon runs out of fuel, citizens experience blackouts up to four days a week. And with a shortage of dollars to import grain and meat, Lebanon is facing famine.
TOPSHOT – A Lebanese woman stands next to her empty refrigerator in her apartment in the port city … [+] AFP VIA GETTY IMAGES
Currency Crisis and Hyperinflation
As Lebanon’s economic unrest continued, those holding Lira rushed to buy dollars, driving the black market exchange rate as high as 10,000 Lira per dollar, up from the official peg of 1,507, devaluing the currency by 85%.
Banks began to limit withdrawals of U.S. dollars, first to $300 and then to none at all. Merchants started to refuse to take payment by cards for fear that banks would not honor the payments.
At a time when the pandemic already left so many with a shortage of food, food prices soared. Where 2 pounds of red meat used to go for $9 dollars, the same amount would now cost $43 or 65,000 lira. People lined up in front of bakeries and butcher shops, hoping to buy goods before prices rose the following day. But prices did continue to rise, and the Lebanese government continued to print more Lira. At the time of writing, the exchange of Lira to Dollar on the black market is 10,000 to 1.
(COMBO) This combination of pictures created on June 29, 2020 shows the black market rate, as … [+] AFP VIA GETTY IMAGES
Some political leaders proposed that the crisis presented an opportunity for Lebanon to take charge of its own food supply and develop its own agricultural industry. But farmers could not afford to build a new infrastructure, to buy seeds, fertilizers or other chemicals needed for crops.
On June 11, 2020, protestors in Tripoli, Lebanon’s second-biggest city, threw petrol bombs at the central bank, setting it on fire.
Where does Lebanon go from here?
Lebanon cannot begin to rebuild its country without establishing a new monetary system, the backbone of every society. Waiting for the government to introduce a new national currency without regained trust in authority is futile. The people of Lebanon, however, have three other options to rebuild their economy without waiting for a government rescue.
Sarah Himadeh inside the Egg theatre leading a team to pick up and recycle garbage. In just 2 weeks, … [+] SARAH HIMADEH
1. Commodity Money
Money does not need to be the paper we are used to seeing in our wallet. Money can be anything that serves as a store of value, unit of account and a medium of exchange. Money is how our communities trade within themselves and with others. To accomplish domestic exchange, Lebanon could use any commodity they trust from grain to gold. An example of this method in modern history is Post-WWII Germany which briefly defaulted to using cigarettes as money for trade of basic necessities within communities, as cigarettes always have a predictable value. A stable unit of account such as grain, gold or even cigarettes, allows residents to buy food for their families, store keepers to receive a fair price for goods, and workers to earn a stable wage.
2. Dollarization
Lebanon cannot sustain itself as a closed economy, as it heavily relies on foreign imports of grain, meat and oil. Therefore, it needs to use a currency that is easy to spend across borders.
In 2009, after a similar wave of hyperinflation, Zimbabwe adopted dollarization, effectively abandoning its own currency and adopting the U.S. dollar as its main currency. This measure was in effect until 2019, when the country reintroduced a new Zimbabwean dollar. This is a tried-and-true formula of using a ‘safe haven’ fiat currency as a substitute, especially for countries with significant dollar-based debts and imports.
Adopting the dollar poses two main problems. The first is it gives ultimate control of your future over to the stability of America, a country known for bending political powers to its will through sanctions. The second is that there are simply not enough dollars to go around. The COVID-19 pandemic created an unprecedented shortage for U.S. dollars globally, now used in over 80% of all global trade. With an already rising black market for dollars in Lebanon, driving demand for dollars further seems like the wrong direction.
Furthermore, there are many expat families who want to send money to their families in Lebanon, but cannot do so in dollars, as the dollars are being confiscated by banks and money exchanges. Those who do get their hands on dollars are much more likely to hoard them than to spend them within their communities, further constraining the economy.
3. Bitcoin
Proponents of digital currencies have long advocated that Bitcoin is tailor-made for these types of economic situations. For the newbs, Bitcoin is a digital store of value which anyone can use on their smartphone or computer. It is independent of governments, has a fixed supply (and therefore is not at risk of inflation), is not controlled by banks or other entities, and cannot be taken from you, unless you share the key to your digital wallet. It is also easy, fast and cheap to send to others across borders and locally.
Bitcoin is the currency of the people, effectively removing it from the grip of a corrupt government. Sounds far fetched? It’s not. Bitcoin is already being used as an insurance policy against corrupt governments in countries such as Cyprus, Ukraine, Venezuela, and El Salvador.
Venezuela provides a blueprint for cryptocurrency adoption. After undergoing its own currency crisis, it is now widely accepting crypto in over 20,000 small and large businesses. Just like Lebanon, Venezuela too was highly dependent on the U.S. dollar, which perpetuated its economic demise, giving too much power to its American counterparts.
The biggest challenge to switching entire communities to Bitcoin continues to be education.
“Majority of us are still in denial of the financial collapse. People are not looking for any alternatives to the current financial system. Education and awareness are key points in bitcoin usage and adoption. We need to teach people to trust this new thing they have never used before. How to get it and then spend it. There is a strong possibility that the Lebanese diaspora will infuse Bitcoin by sending to families directly, as they do not trust the remittance system,” says Marcel Younes, founder of Bitcoin du Liban.
There are wealthy expats who want to send money to Lebanon to help, but are unsure of how to do so safely and productively given the current infrastructure issues with banks and remittance shops. Using Bitcoin, families and donors abroad can send funds directly to those who need it, without undergoing any government scrutiny.
Once Bitcoin is within the communities of Lebanon, it can be used to trade within Lebanon for basic goods and services. Alternatively, it can also be used to pay for imports coming into the country, since Bitcoin can be sent and accessed anywhere in the world and converted into either dollars, or digital dollar-backed stablecoins.
Digital currencies provide the key to communities asserting their independence and taking control of their future, away from the corruption of governments.
It remains to be seen which path Lebanon will choose. One thing is clear after months of protests – the Lebanese are some of the most dedicated and most vibrant people in the world, and have the strength to overcome this period in history and thrive again.
A Lebanese child is pictured in Beirut’s Martyr Square during a gathering on Lebanon’s Independence … [+] AFP VIA GETTY IMAGES
Minister Kanchana Wijesekera says that if Patali Champika Ranawaka, who is in the Opposition, joins the government and assumes the post of Minister of Power and Energy, he is ready to resign from the post at any time.
Wijesekera stated that it would be very good if Patali Champika Ranawaka takes over the ministry post.
Kanchana Wijesekera stated this addressing a media briefing held in Colombo yesterday (21).
