Sri Lanka’s President said he has asked Russia’s Vladimir Putin to help import fuel, as the country faces its worst economic crisis since independence from Britain in 1948.
Gotabaya Rajapaksa said he “had a very productive” discussion with Mr. Putin. It came after Sri Lanka’s Energy Minister warned that the country may soon run out of petrol. On Wednesday, July 6, 2022, hundreds of people took to the streets of the capital, Colombo, to protest against the government.
“I requested an offer of credit support to import fuel,” Mr. Rajapaksa, in a Tweet post, made reference to his conversation with the Russian leader. Mr. Rajapaksa also said he “humbly made a request” for flights between Moscow and Colombo to resume, after the Russian flag carrier, Aeroflot, suspended services last month (June 2022).
“We unanimously agreed that strengthening bilateral relations in sectors such as tourism, trade and culture was paramount in reinforcing the friendship our two nations share.”
Sri Lanka President, Gotabaya Rajapaksa
Purchases Already Made
The country already purchased oil from Russia in recent months to help bolster fuel supplies during the crisis, and the government signalled that it is willing to buy more from the energy-rich country.
Attempts by Mr. Rajapaksa to resolve Sri Lanka’s worst economic crisis in more than 70 years, including securing financial support from India and China, by far, failed to end weeks of shortages of fuel, power, food and other essential items.
On Sunday, June 3, 2022, Energy Minister, Kanchana Wijesekera, disclosed that the country only had enough petrol left for less than a day under regular demand. Last week, authorities suspended the sales of petrol and diesel for non-essential vehicles in an attempt to preserve its dwindling fuel stocks.
Rising Interest Rates
On Thursday, July 7, 2022, the Central Bank of Sri Lanka raised its key interest rates by one percentage point to tackle the soaring cost of living in the country. The lending rate was raised to 15.5%, while the deposit rate was increased to 14.5%, representing the highest in 21 years. It came as the annual inflation hit a record high of 54.6% in June 2022, as the cost of food rose by more than 80%.
Hundreds of protesters on Wednesday, July 6, 2022, gathered near the parliament building in Colombo (Sri Lanka’s capital) as they launched what they called the “final push” to remove Mr. Rajapaksa’s government. This week, the UK reinstated advice against all but essential travel to Sri Lanka because of civil unrest in the country.
The Foreign Office warned that holidaymakers could encounter “demonstrations, roadblocks and violent unrest at short notice”. The Association of British Insurers pointed out that visiting countries against Foreign Office advice would be likely to invalidate one’s travel insurance.
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