Economy has collapsed, unable to buy oil: Sri Lanka PM Ranil Wikremesinghe

Wikremesinghe said that the island nation cannot even pay to import oil.

He went on to add that “We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed. That is the most serious issue before us today."

Wickremesinghe, who is also the country's finance minister, has the unenviable task of stabilizing the economy, which is foundering under the weight of heavy debts, lost tourism revenue and other impacts from the pandemic and surging costs for commodities.

“Currently, the Ceylon Petroleum Corporation is facing a $700 million in debt,” he told parliament adding that “as a result, no country or organization in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash”.

Wickremesinghe said the previous government had failed to act in time to turn the situation around even as Sri Lanka’s foreign reserves dwindled.

Sri Lanka has been muddling through mainly supported by $4 billion in credit lines from neighbouring India.

But Wickremesinghe warned that India would not be able to keep Sri Lanka afloat for too long.

Sri Lanka has already announced that it is suspending repayment of $7 billion in foreign debt due for repayment this year, pending the outcome of negotiations with the International Monetary Fund on a rescue package. It must pay $5 billion on average annually until 2026.

The foreign currency crisis has resulted in massive shortages that have forced people to stand in long lines to buy essentials, including fuel, cooking as and medicine.