Sri Lanka is struggling to raise $587 million to pay for about half a dozen fuel shipments, a top minister said Sunday as the cash-strapped country tries to cope with its worst financial crisis in decades.
The country of 22 million people is unable to pay for essential imports of food items, fertilizer, medicines and fuel — due to a severe dollar crunch.
Power and Energy Minister Kanchana Wijesekera said new fuel shipments were being lined up, but the country is struggling to raise enough funds to pay as the central bank can supply only about $125 million.
Sri Lanka only has 12,774 tons of diesel and 4,061 tons of petrol left in its government reserves, he told reporters in Colombo, the commercial center of the island nation.
"This week we will need $316 million to pay for new shipments. If we add two crude oil shipments this amount shoots up to $587 million," Wijesekera said.
The first shipment of 40,000 tons of diesel from Coral Energy is expected to arrive around July 9 and partial payment of $49 million must be made for a second one from Vitol by Thursday.
Faced with severely limited diesel and petrol stocks Sri Lanka last week closed schools, asked public employees to work from home and restricted government fuel supplies to essential services.
The minister said the country will have to attempt to raise funds from the open market and seek more flexible payment options from suppliers.
Plans to settle the $800 million owed to seven suppliers for purchases made this year were being discussed, he said.
International Monetary Fund (IMF) officials will continue to hold talks with Sri Lanka for a possible $3 billion bailout package, the global lender said last week after wrapping up a 10-day visit to Colombo.
However, the immediate release of funds from the IMF is unlikely because the country has first to get its debt on to a sustainable path.