Sri Lanka to introduce guaranteed weekly fuel quota for consumers at filling stations from next month

The Sri Lankan government plans to introduce a fuel rationing scheme from next month, under which registered consumers at filling stations would be guaranteed a weekly quota, a senior minister said on Sunday.

The island nation has been experiencing long lines for fuel refilling since mid-February with pressure coming on the diesel supplies for thermal power generation.

By early April, the island was experiencing 10-hour power cuts due to shortages of diesel and furnace oil for power generation.

“We have no choice but to register consumers at filling stations and give them a guaranteed weekly quota until we are able to strengthen the financial situation, restore 24 Hour Power and a steady Supply of fuel. I hope to have this system in place by the 1st week of July,” Energy Minister Kanchana Wijesekera tweeted on Sunday.

The minister said that the supply of fuel should be managed until there is a round-the-clock 24-hour uninterrupted supply of electricity and fuel.

This paucity has led to reports of stockpiling and hoarding of fuel.

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Wijesekera hoped that this measure of imposing a fuel quota would go a long way in addressing the crisis.

“With the financial restrictions in place, the Ceylon Petroleum Corporation imports fuel to manage for a week, but some consumers stockpile fuel for a month or more for their machinery and generators,” he said in another tweet.

He said that 24-hour power supply costs an additional USD 100 million monthly for diesel, furnace oil and naptha.

The shortage in gas supply has increased the demand for electricity and kerosene, and the monthly fuel bill that was USD 200 million four months ago, now stands at USD 550 million, the minister added.

Meanwhile, the last of the fuel shipments due under the Indian Line of Credit are arriving in Sri Lanka later this month, with no indications on the sustenance of future supplies, which are dependent on India's assistance.

“We are expecting the last diesel shipment under ILC (Indian Line of Credit) on June 16 and the last petrol shipment on June 22," Wijesekera told reporters on Saturday.

Sri Lanka’s fuel purchases have been totally dependent on the ILC -- a USD 500 million credit line initially which was supplemented with another USD 200 million later.

Wijesekera said the minimum daily requirement of diesel was 5,000 metric tonnes as people need it to run private generators due to the power cuts imposed.

India has helped Sri Lanka with thousands of tonnes of diesel and petrol, apart from food and medical supplies, to help ease the acute fuel shortage in the debt-ridden island nation.

The economic crisis in Sri Lanka has prompted an acute shortage of essential items like food, medicine, cooking gas and other fuel, toilet paper and even matches, with citizens for months being forced to wait in lines lasting hours outside stores to buy fuel and cooking gas.

The severe depreciation of the Sri Lankan rupee against the US dollar, the soaring global prices of crude due to the ongoing conflict in Ukraine and the depleting gas reserves are the reasons why the country has been struggling to import fuel.

Consequently, spontaneous protests have been reported at filling stations across the country where consumers have been waiting in long serpentine queues for fuel for hours on end.