Sri Lanka introduces National Fuel Pass amid emergency. What it means

Crisis hit neighbor Sri Lanka's state-run Ceylon Petroleum Corporation (CPC) has introduced a fuel pass scheme in the country - a system in which fuel would be rationed under a limited weekly quantity. The steps comes after the government has stopped fuel supplies since June 27 and restricted it only to essential services. This has also led to reduction in the prices of diesel and petrol in the country for the first time since February, after five hikes during the period so far.

File photo used for representational purpose only (Bloomberg)
File photo used for representational purpose only

The country has reduced its diesel and petrol retail prices by Rupees 20 each, both of which had been raised by 50 and 60 respectively at the end of May. The new prices became effective from 10.00 pm on Sunday. Sri Lanka has been witnessing severe foreign exchange shortage that has hampered its economic situation and the import of fuel and other essentials in the country.

Also Read : Petrol and diesel demand in India slumps in July as monsoon sets in

Before the introduction of the National Fuel Pass, the country saw several miles-long fuel queues near the Lankan Indian Oil Company (LIOC) petrol stations. There were even reports of violence at fuel queues and nearly 20 people died of exhaustion after spending several days continuously in the fuel queues.

The fuel crisis in Sri Lanka has been going on for several months and since the beginning of this year, the country has been relying on an Indian line of credit to fund fuel purchases.

Sri Lanka, which relied on an Indian credit line for fuel imports since February, has now exhausted the facility. The last fuel shipment under the Indian Credit Line arrived on June 16. In mid-April, the country had declared bankruptcy by refusing to honour its international debt. The situation created a thriving black market where people paid to secure a place in the queue and fuel was sold four times higher than the legal retail price.

(with inputs from PTI)

First Published Date: 18 Jul 2022, 14:46 PM IST
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