Sri Lanka is in “extreme peril” while the crisis lingers

President Ranil Wickremesinghe warned on Wednesday that fuel shortages caused by Sri Lanka’s unprecedented economic crisis will endure until the end of the year.

The 73-year-old, who came to power last month after his predecessor Gotabaya Rajapaksa was forced to flee the country and quit after months of unrest, stated that the financial breakdown has become a significant political problem.

“Today, we face a predicament that our country has never encountered in recent memory,” he declared as he opened a new legislative session.

“We are in danger.” Tens of protesters stormed Rajapaksa’s official mansion last month due to the severe food, gasoline, and medical shortages that have plagued Sri Lanka’s 22 million inhabitants since late last year.

Wickremesinghe stated that the only way out of the issue was “if we all face this problem as one people,” and he urged all parties in parliament to support his plan for a “unity government.”

Before defaulting for the first time on its $51 billion foreign debt in mid-April, Sri Lanka was regarded as a thriving middle-income country.

The country has run out of foreign currency to finance imports, and officials estimate it needs at least $4 billion to import crucial supplies and alleviate present shortages.

Wickremesinghe has been in charge of negotiations with the International Monetary Fund to negotiate a four-year bailout plan. He informed the legislature that negotiations were advancing but did not provide a date for when an agreement would be reached.

Motorists wait days to purchase rationed fuel while the nation endures protracted power outages. As a result, the inflation rate has surpassed 60%.

Wickremesinghe commended India for providing credit lines for importing gasoline and diesel. Still, he stated that Colombo must be able to pay with its foreign exchange revenues and that rationing will remain at least until the end of the year.

He also criticized Rajapaksa for rejecting two significant Japanese infrastructure investments that could have yielded $3 billion. In addition, Wickremesinghe stated that canceling a light rail transit (LRT) and a marine terminal at the Colombo port harmed relations between Japan and Sri Lanka.

Wickremesinghe did not mention China, which holds almost 10 percent of Sri Lanka’s bilateral loans. Beijing’s approval is essential for any debt restructuring agreement.