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Tuesday September 27th, 2022

Sri Lanka must fund fuel imports with export income, remittances, says president

Handle pumping gasoline fuel nozzle to refuel. Vehicle fueling facility at petrol station. White car at gas station being filled with fuel. Transportation and ownership concept.

ECONOMYNEXT – Sri Lanka must look to fund fuel imports with export income and foreign remittances rather than with international assistance and will have to limit selected imports to pay for fuel even as fuel supply is curtailed, President Ranil Wickremesinghe said.

Delivering his inaugural address in parliament as president on Wednesday August 03, Wickremesinghe said Sri Lanka’s immediate need is fuel, adding that he has also instructed the police to ensure fair distribution of the limited stocks.

“While appreciating the international assistance in addressing the fuel shortage, it in time that we now initiated a system for such importation from our own export income and foreign remittances.

“We also have to limit selected imports in order to balance the payments for fuel. On the other hand, fuel supply has to be curtailed. These hardships would need to be borne until the end of this year,” he said.

Sri Lanka has already jacked up rates to kill domestic credit and fuel prices have been hike, leading to a fall non-oil imports.

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But Sri Lanka is printing money to pay state workers and ironically to fund the CPC itself, which increases outflows more than inflows, creating forex shortages.

Sri Lanka has in recent currency crises triggered by flexible inflation targeting has borrowed money to import fuel leading to over a 3.0 billion US dollars debt in the state run Ceylon Petroleum Corporation.

The president further said the limited stocks of fuel must be fairly distributed, referring to reports of groups acting violently at filling stations and jumping the queue.

“Complaints are being received about people breaking the queue by force, without allowing the people who have been in the queue for days to obtain fuel. Such unruly conduct cannot be allowed. The limited amount of fuel that we can provide must be fairly distributed. I have directed the Inspector General of Police to strictly enforce the law against people who interfere with queues,” he said. (Colombo/Aug03/2022)

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