Cash-starved Sri Lanka to end fuel duopoly to ease shortages – The Peninsula

Cash-starved Sri Lanka to end fuel duopoly to ease shortages – The Peninsula

Colombo: Sri Lanka will allow companies from oil-producing countries to import and sell fuel, the power and energy minister said on Tuesday, ending a duopoly as it tries to overcome a shortage of petrol and diesel that is exacerbating an economic crisis.

The Cabinet decision came as the minister, Kanchana Wijesekera, headed to Qatar and a ministerial colleague was due to arrive in Russia on Sunday for talks on energy deals.

Sri Lanka is suffering its worst economic crisis since its independence, with foreign exchange reserves at a record low of $1.92 billion, according to the Central Bank, though analysts estimate a lower level of useable funds.

The island of 22 million people is struggling to pay for essential imports of food, medicine and, most critically, fuel.

Sri Lanka's economy contracted by 1.6% in January to March, data released by the statistics department on Tuesday showed, and analysts said higher inflation and political uncertainty could lead to up to a 5% contraction in growth during the second quarter.

The government closed urban schools for about two weeks from Tuesday and allowed fuel supplies only to services deemed essential like health, trains and buses as stocks would only last only a week or so based on