Colombo, 25 February 2022 (TDI): Sri Lanka recently imposed power cuts as the country’s economic climate worsens. The deepening financial crisis has caused shortages of fuel which has handicapped the country’s electric grid.
Sri Lanka’s Public Utilities Commission said that it would cut power for four and a half hours on Wednesday after cutting power off for two hours on Monday and Tuesday. Power outages will occur on a rotating basis between various regions from 8:30 am to 10:30 pm.
“shortage of fuel is causing this issue. We are having a fuel crisis, not an electricity crisis.” -Janaka Ratnayake, Utilities Commission Chairman.
In the past few days, citizens have had to queue up at gas stations in order to get fuel, as the fuel shortage continues to affect the nation, while some fuel stations remained closed as they had not received their supply.
Sri Lanka’s currency has also been severely affected amidst foreign reserves drying up, this has significantly impacted the import of essential commodities which includes milk powder, petrol, and cooking gas.
Sri Lanka’s economy is heavily dependent on trade and tourism, the pandemic has affected both these sectors, the government has estimated a loss of about $14 billion over the past two years.
Inflation increased to 12.1% in December last year while the economy contracted by 1.5% between July and September 2021. Ceylon Electricity board, a government-owned electricity producer had requested permission for fuel cuts as fuel shortages had led to a loss of 700 megawatts from the national grid.
As a result of this, the country has taken out numerous loans and faces a payment of up to 12.5 billion in sovereign bonds, the government is building back its reserves in order to meet these obligations. All these factors have snowballed into the worst economic crisis the country has faced in decades.
